-The professor asked me to find accounting news related to auditing and attestation area, and
write a summary of it(no more than 200 words). I think my grammar is weak, could you help
me to correct and improve it ?
-I also need to develop two questions related to this news, now I have no idea, could you give
me some advices?
“Critical audit matters coming into focus” by Russ Banham, journalofaccountancy.com,
Summary: The article discuss the how auditors, audit committee and investors are influenced by
new auditing standard which requires auditor to identify and disclose critical audit
matters(CAMs) on audit work. Accounts or disclosures considered as CAMs should be material to
financial statements and involve “challenging, subjective, or complex” auditor judgments. It’s
also matter that auditors have communication with audit committee. The disclosure of CAMs will
be opportunity for investors to get more comprehensive and valuable information of company
they invested. But it contains several challenges to auditors. First, because the PCAOB didn’t
provide exactly instructions about what constitute CAMs, auditor should depend on their own
judgement to identify things could be CAMs. Second, auditor cannot decide the number of CAMs
in the audit report. Finally, it’s not appropriate for auditor use boilerplate language for different
years CAMs. Sullivan, the manager from Deloitte, said the engagement team need to consider
more situations related to CAMs and audit group is expected to have more communication with
client, and audit committee. However, it still have time for audit firms to prepare for new auditing
The new auditing standard AS 3101, The Auditor's Report on an Audit of Financial Statements
When the Auditor Expresses an Unqualified Opinion, adopted by the PCAOB in 2017, is
predicated on enhancing the relevance and usefulness of the auditor's report. The first phase of
implementation affects PCAOB audits of companies with fiscal years ending on or after Dec. 15,
2017, and includes disclosing auditor tenure and other changes to the form and content of the
The second phase of implementation requires CAMs to be disclosed in the auditor's report
beginning with fiscal years ending on or after June 30, 2019, for audits of large accelerated filers,
and for all other applicable companies for fiscal years ending on or after Dec. 15, 2020.
The standard is intended to provide investors with more comprehensive information for
investment decisions and is an opportunity for auditors to provide more information of
value during the audit.
how the CAM was addressed in the audit, and refer to the relevant financial statement
accounts or disclosures in making these determinations.
While CAMs may be matters that were traditionally discussed with audit committees,
they were not discussed in an auditor's report.
First, the PCAOB did not provide an all-inclusive list of what might constitute a CAM.
Other possible CAMs include a company's valuations of hard-to-value securities and
investments in nonliquid assets, assuming in both cases that they are material to the
A second challenge is how many CAMs an auditor must detail in the report.
Boilerplate language is another area that will represent a challenge for auditors related to
The other caveat I have for investors is that they should not expect the CAMs to be a
proxy for the conversations they must still have with management, the audit committee,
and the auditors.
the good news is that the phased effective dates give auditors, audit committees, and
preparers time to get ready.
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