Audit Reports: PCAOB Releases Reproposal of Amendments to Its Audit Report Standard

Sullivan & Cromwell LLP - May 25, 2016

The Public Company Accounting Oversight Board has reproposed for public comment amendments to its standard on the auditor’s report on financial statements.  Most notably, the reproposed standard carries forward, in revised form, a requirement for the auditor to identify and discuss, in the audit report, “critical audit matters” that were addressed in the audit.  The comment period will run until August 15, 2016, raising the possibility that the proposed amendments could be in effect for calendar year companies’ next audited financial statements.  In addition to deciding whether to comment, companies and their audit committees should consider informing themselves now as to how their auditors may respond to this new requirement, and whether additional company disclosure may be necessary or desirable in light of the anticipated new audit report disclosures.