CAQ Comment Letter to the PCAOB Outlines Possible Changes to the Auditor’s Reporting Model

In a comment letter to the Public Company Accounting Oversight Board (PCAOB), the Center for Audit Quality (CAQ) has reaffirmed the public company auditing profession’s commitment to responsible changes to the auditor’s reporting model to better serve investors.

The letter puts forth several proposals that the CAQ believes would be responsive to many of the information needs of investors, including: a new examination report by the auditor on management’s Critical Accounting Estimates disclosure in Management’s Discussion and Analysis ; an emphasis-of-matter approach anchored to the most significant matters in the financial statement; and the addition of clarifying language – on reasonable assurance, auditor independence, and management’s responsibility for preparing the financial statements, among other recommendations – to the current auditor’s report.

The CAQ believes that these changes would enhance audit quality, narrow the expectation gap, and meet the needs of investors without creating significant unintended consequences.

The full letter is available at: http://www.thecaq.org/newsroom/pdfs/CAQCommentLetter-AuditorsReportingModel.pdf