Question

what are CAMs? why are they important? when will CAMs required to be shown in the auditor report?

Answer 1

CAMs Meaning: "Critical Audit Matters"

CAMs are any matters arising from the audit of financial statements communicated or required to be communicated to the Audit Committee that

1) Relate to account or disclosure that are material( important) to the financial statements

2) Involved specially challenging, subjective or complex auditor judgement

CAMs Importance

The Standard Indicates that CAMs " will likely be identified in areas that investors have indicated and this would be particulars interest to them, so therefore significant management estimates and judgement made in preparing for the financial statements, in areas of ' high fiancial statement and audit risk; significant unusual transactions and other significant changes changes in the financial statment"

CAMs requiredment to shown in audit report

when detemining whether a matter involved specially challenging, subjective or complex auditor judgement, the auditor takes into accounts certain factors Includinf the auditor assessment of the risks of material misstatement

The communication of each CAM in the auditor's report includes:

- the identification of CAM

- a description of principal consideration

- a description how the CAM was addressed in the audit

- a refrence to the relevant financial statement accounts or disclosures

The PCAOB " Excepts that in most audits to which the requirements to communicate CAMs Applies the auditor will determine that at least one matter involved especailly challenging, subjective or complex auditor judgement.

Here PCAOB Denotes to The Public Company Accounting Oversight Board