December 4, 2020

Common Themes Emerge in Data from First Year of CAMs Implementation 

Common Themes Emerge in Data from First Year of CAMs Implementation 

Thursday, December 3, 2020

Taxes, goodwill and/or intangibles, contingent liabilities, and revenue among most common CAMs in auditor reports for S&P 100 companies

Washington, D.C. (December 3) – The CAQ released a new report today with data and analysis on the first year that critical audit matters (CAMs) were included in auditor reports. Consistent with the requirements of the Public Company Accounting Oversight Board (PCAOB), the CAQ report finds that CAMs for S&P 100 companies frequently focused on some of the most complex accounting issues that require a high degree of judgement by the auditor.

The CAQ report, Critical Audit Matters: A Year in Review, finds that every auditor report for S&P 100 companies contained at least one CAM. Auditor reports included a total of 198 CAMs for an average of just under two (1.98) CAMs per report. There was a single auditor report that communicated five CAMs, while 32 auditor reports communicated only one CAM.

Four common categories of CAMs emerged in S&P 100 auditor reports: taxes (16% of CAMs), goodwill and/or intangibles (14% of CAMs), other contingent liabilities (12% of CAMs), and revenue (9% of CAMs).

“Public company auditors have embraced the PCAOB’s requirement to report critical audit matters, initiating a new era of increased transparency around the audit,” said CAQ Executive Director Julie Bell Lindsay. “We want investors to know that critical audit matters add to the total mix of information available as they make capital allocation decisions.”

Auditors began communicating CAMs in their auditor’s reports of large accelerated filers in 2019. The PCAOB defines a CAM as any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee that relates to accounts or disclosures that are material to the financial statements and involved especially challenging, subjective or complex auditor judgement. The PCAOB’s phased implementation approach of CAMs based on filing status means that a year from now thousands more CAMs will be included in auditor reports.

“The requirement for the auditor to determine and communicate critical audit matters is one of the most significant changes to the auditor report in decades,” said Lindsay, “The audit profession’s extensive up front planning resulted in disclosures that give investors a better understanding of the areas of the audit that involved especially challenging, subjective, or complex auditor judgment.”
About the Center for Audit Quality
The Center for Audit Quality (CAQ) is a nonprofit organization dedicated to promoting high-quality performance by public company auditors; convening and collaborating with financial reporting stakeholders; and advocating for policies and standards that promote public company auditors’ objectivity, effectiveness, and responsiveness to dynamic market conditions. For more information, visit

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