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Comment on PCAOB’s CAM requirements

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In our response to the Public Accounting Oversight Board’s (PCAOB) Interim Analysis No. 2020-01, Critical Audit Matter Requirements, we discuss implementation of the critical audit matter (CAM) requirements and express our belief that communications between auditors and audit committees were generally enhanced as a result of the Board’s CAM requirements. Beginning early in the year of implementation, auditors focused on educating management and audit committees on the CAM requirements, providing insights on how the engagement team was applying the requirements to the specific audit engagement, and discussing the CAM reporting language. However, we do not believe the fact that an audit matter may be a CAM changed the questions or approach related to engagement teams’ interactions on those matters.

We further commend the PCAOB for seeking feedback from a variety of stakeholders. In our view, not only will such feedback enable the PCAOB’s Office of Economic and Risk Analysis to make meaningful observations about how the CAM requirements have impacted the audit process, but the overall process can provide a framework for making future standard-setting activities more effective.

To read more, download our letter here.