On July 11, 2019, the PCAOB published additional guidance for audit committees about CAMs (Critical Audit Matters). I have provided a link below to the additional guidance. From the additional guidance, I am also providing immediately below a snapshot to the PCAOB’s chart to help determine whether a matter is a CAM, plus four of the PCAOB’s responses to frequently asked questions that I found interesting. This is my fourth relatively recent post in which I have commented about CAMs.
Immediately below is a snapshot to the PCAOB’s chart to determine whether a matter is a CAM:
The following are snapshots of four of the PCAOB’s responses to frequently asked questions that I found to be interesting. While the responses are useful and helpful, I don’t find that they simplify the matter. The response in the first snapshot below also could be confusing – I expect that audit committees will want to have a significant role in, or at least significant input in or comments about, CAMs and certain specific CAMs and proposed CAMs in particular. Whereas the auditor might have ultimate say about how a CAM is worded (because it is the auditor’s report), I expect that audit committees will be directly involved in and vocal about whether or not a matter is a CAM, and how the CAM is communicated. And I expect that in some circumstances there might be or will be disagreement, at which point the audit committee, or the board, or the company might be put the position of having to evaluate whether to communicate or respond further about the CAM, and the manner of doing so.
The following are snapshots of four of the PCAOB’s responses to frequently asked questions that I found to be interesting:
Click on the following link to be taken to the PCAOB’s page with the new July 11, 2019, PCAOB guidance for audit committees about CAMs:
Click to access Audit-Committee-Resource-CAMs.pdf
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Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation.
Thank you for reading this website. I ask that you also pass it along to other people who would be interested as it is through collaboration that great things and success occur more quickly.
Best to you, David Tate, Esq. (and inactive California CPA) – practicing in California only.
I am also the new Chair of the Business Law Section of the Bar Association of San Francisco.
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The following are copies of the tables of contents of three of the more formal materials that I have written over the years about accounting/auditing, audit committees, and related legal topics – Accounting and Its Legal Implications was my first formal effort, which resulted in a published book that had more of an accounting and auditing focus; Chapter 5A, Audit Committee Functions and Responsibilities, for the California Continuing Education of the Bar has a more legal focus; and the most recent Tate’s Excellent Audit Committee Guide (February 2017) also has a more legal focus:
Accounting and Its Legal Implications
Tate’s Excellent Audit Committee Guide
The following are other summary materials that you might find useful:
From a prior blog post which you can find at https://wp.me/p75iWX-dk if the below scan is too difficult to read:
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A blog discussing the law, D&O, governance, liability and other aspects of public and private businesses, not for profit organizations, and governmental entities – see additional detail below - note: sometimes I post information just to pass it along on these topics (not an endorsement), and sometimes I provide only brief comments or no comments, not a more full discussion. 