Question

This is an auditing question not a accounting question sorry about that.

Hi! I'm working on the following auditing problem and would like some help:

Write an executive summary of what is contained in the article. The format
should be as follows and should not be more than one to two pages in length:
• Summary of information contained within the article.
• Explanation as to why the article you chose has relevancy to the
accounting environment.
• Explanation as to how this article could be used as the basis for starting a
research paper pertaining to contemporary topics.
• Attach a copy of the article to the executive summary.
• Make sure your article relates to auditing.
• Papers should utilize 12 point Times New Roman font and use justified
settings.

The article is the following:

SEC approves PCAOB’s new auditor’s reporting model

The SEC unanimously approved the PCAOB's new auditor's reporting standard, supporting the communication of "critical audit matters" as a way for auditors to provide more information to investors and the public.

As defined in the PCAOB standard and related amendments, critical audit matters are any matter arising from the current period's audit of the financial statements that was communicated or required to be communicated to the audit committee, and that:

Relates to accounts or disclosures that are material to the financial statements, and

Involved especially challenging, subjective, or complex auditor judgment.

The standard marks the first major change to the standard form auditor's report in 70 years, PCAOB Chairman James Doty has said.

SEC Commissioner Kara Stein said in a statement that she expects the new auditor's report to provide investors with meaningful information, including significant estimates and judgments, significant unusual transactions, and other areas of risk at a company.

SEC Chairman Jay Clayton said in a statement that he supports the standard, but he cautioned that some commenters were concerned that divulging critical audit matters would result in an increase in litigation that does not benefit investors, or in boilerplate disclosures.

Because of this, Clayton said he is pleased that the PCAOB intends to monitor the results of implementation of the standard through its post-implementation review process.

Center for Audit Quality (CAQ) Executive Director Cindy Fornelli called the new standard a positive step. The CAQ is affiliated with the AICPA.

"The CAQ welcomes the enhanced auditor's reporting model to provide additional information to investors and other stakeholders in an increasingly complex and global business environment," Fornelli said in a statement. "We appreciate the PCAOB's responsiveness to the auditing profession's concerns and recommendations throughout the proposal process, including observations from the CAQ's field-testing."

Answer 1

Summary of the article.

Audit reports are important as they are the medium through which stakeholders understand the profitability and return of their investment, PCAOB has introduced new standard to increases quality of reporting..

1. The SEC unanimously approved the PCAOB's new auditor's reporting standard which supports communication of critical audit matters to stakeholders.

2. The standard marks the first major change to the standard form auditor's report in 70 years-PCAOB Chairman James Doty

3. Critical Audit matters basically contain disclosures that are material to the financial statements.

4. SEC Commissioner Kara Stein and Center for Audit Quality (CAQ) Executive Director Cindy Fornelli supported the standard calling it as a positive step.

Whereas SEC Chairman Jay Clayton is supportive but at the same time worried about the increasing number of litigations.

Overall the standard has good response, as it has all steps from planning reporting to post implementation review.

2.Explanation as to why the article you chose has relevancy to the accounting environment

This standard relates to reporting of critical matters relating to financial statements, which form a part of accounts and thus it a crucial impact on accounting.

3. This article being recently published and the standard being one of the biggest reforms is going to be applicable to large number of entities thus being a strong base for starting researcj

4, (please take a copy of the article)

5. (already considered)

6. (Please select relevant font size and type as i dont find the options)

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