United States

PCAOB guidance on communication of CAMs


The Public Company Accounting Oversight Board (PCAOB) recently released guidance regarding the communication of critical audit matters (CAMs) in accordance with revised Auditing Standard (AS) 3101, The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion. Per the guidance, for each CAM communicated in the auditor’s report, the auditor is required to:

  • Identify the CAM
  • Describe the principal considerations that led the auditor to determine that the matter is a CAM
  • Describe how the CAM was addressed in the audit. AS 3101 includes four elements that the auditor can use, individually or in combination, to describe how the CAM was addressed in the audit:
    • The auditor’s response or approach that was most relevant to the matter
    • A brief overview of the audit procedures performed
    • An indication of the outcome of the audit procedures
    • Key observations with respect to the matter
  • Refer to the relevant financial statement accounts or disclosures that relate to the CAM

In addition, the guidance answers frequently asked questions regarding the communication of CAMs. As previously communicated, in March the PCAOB released guidance regarding the determination of CAMs.