Critical Audit Matters: Lessons Learned, Questions to Consider, and an Illustrative Example

A 2017 standard from the Public Company Accounting Oversight Board established that auditors of large accelerated filers would be required to communicate critical audit matters (CAMs) in their auditor’s reports for fiscal years ending on or after June 30, 2019. Continuing the public company auditing profession’s longstanding and constructive engagement on updating the auditor’s report, auditing firms prepared for CAMs implementation by conducting “dry runs,” practicing the identification and drafting of CAMs, as well as engagement with management and audit committees prior to the effective date. Critical Audit Matters: Lessons Learned, Questions to Consider, and an Illustrative Example shares early observations from these dry runs, providing valuable perspective for audit committees, auditors, and others in the financial reporting ecosystem.