"Critical Audit Matters Reporting: A First Look" from CII-REF evaluates the CAM disclosures of six companies deemed by CII to have relatively more effective disclosure on the top three CAM topics to date (revenue, goodwill and taxes) across the four CAM communication requirements, i.e.,:
For each critical audit matter, the auditor must:
- Identify the critical audit matter
- Describe the principal considerations that led the auditor to determine that the matter is a critical audit matter
- Describe how the critical audit matter was addressed in the audit
- Refer to the relevant financial statement accounts or disclosures that relate to the critical audit matter
The report aims to explain why and how CAM disclosures to date generally have fallen short of investor expectations and to suggest how they could be improved, specifically with reference to prong #3 above, as illustrated by disclosure mock-ups at the end of the report.
See our recent report: "PCAOB Shares CAM Implementation Insights," and access numerous additional resources on our Audit & Audit Firms page. This post first appeared in the weekly Society Alert!