The SEC has approved the PCAOB proposal to adopt AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, largely as proposed. Our memo on the proposed rules is here and we will issue an update shortly.
The rule is controversial primarily for requiring the auditor to communicate in the auditor’s report any critical audit matters (CAMs) arising from the current period’s audit, or state in that report that the auditor determined that there are no CAMs. The staggered effective date reflects the debate surrounding CAMs, so that:
- For all paragraphs, except the paragraphs related to CAMs: all audits of fiscal years ending on or after December 15, 2017; and
- For all paragraphs related to CAMs:
- For audits of large accelerated filers: fiscal years ending on or after June 30, 2019; and
- For audits of all other companies to which the requirements apply: fiscal years ending on or after December 15, 2020.