In this paper, you are asked to write an essay on potential positive outcomes and unintended consequences from the inclusion of critical audit matters in the auditor’s report. You are required to provide a thorough discussion of positive outcome(s) discuss only the outcomes that you think are significant for open regulation.

PCAOB Disclosure of Critical Audit Matters in the Audit Report

Please write an essay discussing potential positive outcomes and unintended consequences from the
inclusion of critical audit matters in the auditor’s report. I do not want a list of many potential
outcomes, rather I want a thorough discussion of one or two positive outcomes and/or one or two
unintended consequences. No more than three discussion points max, but at least one positive and
at least one unintended consequence. Discuss the potential outcomes that you think are most
important for the open regulation

PCAOB Disclosure of Critical Audit Matters in the Audit Report

11:00 Class Assignment #2, Due December 4th in class.

Background

In 2013, the PCAOB proposed changes to the Auditor’s Report to expand the amount of information included in the report beyond the simple “pass/fail” model. The most recent proposal calls for inclusion of a list of “critical audit matters” which are the matters that the auditor

determines to be (1) most difficult, subjective, or complex, (2) pose the greatest difficulty to audit, or

(3) the most difficulty in forming the opinion on the financial statements.

(See document beginning at the bottom of Page 14 for information about critical audit matters.)

The Assignment

Please write an essay discussing potential positive outcomes and unintended consequences from the inclusion of critical audit matters in the auditor’s report. I do not want a list of many potential outcomes, rather I want a thorough discussion of one or two positive outcomes and/or one or two unintended consequences. No more than three discussion points max, but at least one positive and at least one unintended consequence. Discuss the potential outcomes that you think are most important for the open regulation.

Your essay is to be no more than two pages (double spaced twelve point font). 1.5 pages is ideal. Every sentence should be informative, clear and concise.

Just a comment. Writing is iterative. Meaning, write a draft to get your thoughts on paper. Then, let it sit for a day or so before you come back and clean up the draft.

The grade for the assignment will be based on the following:

1. The quality of writing (e.g., grammar, tone, conciseness, spelling, etc.)
2. Evidence in the essay that you have given significant thought to your responses.

NOTE: This essay is closed person (i.e., don’t talk to anyone about it) but open to anything else (e.g., internet, etc.). Admittedly, I cannot prevent you from talking to others, so this is where your own integrity and ethics come in to play. Choose wisely…