As anticipated, the PCAOB adopted at its open meeting today the controversial new expanded auditor's report standard that will require auditors to include, among other things (see, e.g., this Fact Sheet), a discussion of "critical audit matters" (CAMs) and their tenure with the company, in the auditor's report. The effectiveness of the new standard - which is still subject to SEC approval - is subject to a phased implementation period, as follows:
- New auditor's report format, tenure, and other information: audits for fiscal years ending on or after December 15, 2017
- Communication of CAMs for audits of large accelerated filers: audits for fiscal years ending on or after June 30, 2019
- Communication of CAMs for audits of all other companies: audits for fiscal years ending on or after December 15, 2020
The CAMs discussion is not required for EGCs, B-Ds, investment companies other than business development companies, and employee stock purchase, savings, and similar plans.
As reiterated in last week's Society Alert (see "PCAOB to Vote on Adoption of Expanded Auditor Report Next Week" in Leg & Reg), a review of comments submitted on the 2016 reproposal revealed that various aspects of the proposed reforms - which were not positively received by the corporate community from the outset (see, e.g., the Society's letter here) - were still being perceived unfavorably by this stakeholder group.