United States: PCAOB Continues To Expand CAMs Resources

Last Updated: July 25 2019
Article by Alan J. Wilson

Earlier this month, the Public Company Accounting Oversight Board released additional resources regarding its new Critical Audit Matters (CAMs) disclosure requirement, with the latest resources targeted to audit committees and investors. Both resources provide some general background on CAMs (see our June 2, 2017 and October 30, 2017 posts) and include helpful responses to FAQs, many of which overlap. The resource for audit committees also includes some additional guidance specifically tailored to the audit committee's role with respect to CAMs and includes a decision tree to illustrate the considerations auditors work through in determining which matters to disclose as CAMs.

Some key takeaways from the latest FAQs are highlighted below:

  • Impact on Audit Opinion. CAMs do not alter the opinion that the auditor provides on the financial statements. CAMs are also not a way for auditors to provide a separate opinion on the CAM or on the accounts or disclosures related to the CAM.
  • Reflection on the Company. CAMs do not necessarily reflect negatively on the company, nor do they necessarily mean that the auditor identified a misstatement or deficiencies in internal control over financial reporting.
  • Number and Type of CAMs / Benchmarking Considerations. The number of CAMs to be communicated will vary based on the complexity of the audit. CAMs may vary from audit to audit, company to company, and industry to industry. Peer companies within the same industry may not have the same type and number of CAMs. In addition, "[t]here is no expectation that CAMs be the same each year." The CAMs rule includes a note stating, "It is expected that, in most audits, the auditor would determine that at least one matter involved especially challenging, subjective, or complex auditor judgment."
  • Impact of Significant Events. A significant event, such as a cybersecurity breach, does not automatically give rise to a CAM, though if the event affects the financial statements and becomes the subject of communications between the auditor and the audit committee, it is possible that such an event could give rise to a CAM.
  • Disclosure of "New" Information. CAMs generally are not expected to provide information about the company that has not been made publicly available by the company within or outside the financial statements (e.g., in press releases and other public statements), unless such information is necessary for the auditor to describe its principal considerations leading to the determination that a matter constitutes a CAM or how the matter was addressed in the audit.
  • Impact on Audit Procedures. The new CAMs requirement does not mandate additional audit procedures, other than requirements to determine, communicate, and document CAMs.
  • Relationship to Critical Accounting Estimates. CAMs are not the same as critical accounting estimates that management discloses in MD&A. Some critical accounting estimates or components of such estimates may be the subject of a CAM, but not all critical accounting estimates necessarily will give rise to CAMs. Moreover, CAMs are broader and include all matters communicated or required to be communicated to the audit committee.
  • Responsibility for CAMs. Management and the audit committee do not approve CAMs. The PCAOB has made clear that "CAMs are the sole responsibility of the auditor." The auditor is, however, required to share a draft of the auditor's report containing the CAMs disclosure with the audit committee. The PCAOB acknowledges that "the auditor could discuss with management and the audit committee the treatment of any sensitive information" as the auditor determines how best to comply with its communication requirements.
  • Relationship to International Standards. Compared to the International Auditing and Assurance Standards Board's Key Audit Matters (KAMs) requirement, CAMs are generally similar, though there are key definitional differences. KAMs focuses on "matters that were of most significance during the audit," while CAMs involves "matters involving especially challenging, subjective, or complex auditor judgment." As a result, differences could result in how CAMs are identified or described in the auditor's report, as compared to KAMs.

Since the PCAOB adopted, and the SEC approved, the CAMs requirement in 2017, both regulators have emphasized the importance of post-implementation review. The PCAOB has engaged in earnest over the past year to assist issuers and auditors prepare for the CAMs disclosure requirement, which is now effective for large accelerated filers for audits of periods ending on or after June 30, 2019. The PCAOB's latest resources lay out a three-part plan for the PCAOB's next steps:

  1. Stakeholder Feedback – the PCAOB will engage with auditors, investors, financial statement preparers, audit committee members and other stakeholders to learn about their experiences with CAMs.
  2. Compliance and Inspections – the PCAOB's inspections team will promote compliance through inspections of audit firms, with the first opportunity to inspect taking place in the second half of 2019. The PCAOB has indicated that it expects to publish a summary of its preliminary observations from these initial inspections, which should offer helpful guidance before the standard takes effect for audits of all other companies to which it applies for fiscal years ending on or after December 15, 2020.
  3. Post-Implementation Review – the PCAOB plans to conduct a post-implementation review of the new requirement, including analyzing its effectiveness, after the implementation of the new standard is completed in December 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions