Issue Information

• Published date: 01 July 2018
• Date: 01 July 2018
• DOI: http://doi.org/10.1002/jcaf.22303

VOLUME 29, NUMBER 3 •July 2018

Features

7AS 3101: The PCAOB’s New Auditor Reporting Requirements

Paul M. Clikeman

AS 3101, The Auditor’s Report on an Audit of Financial Statements When the Auditor

Expresses an Unqualified Opinion (PCAOB, 2017) represents the most significant change to

American audit reports in more than 70 years. The new standard form unqualified report,

which is required for audits of fiscal years ending on or after December 15, 2017, moves the

auditor’s opinion to the first paragraph, uses section titles to identify important information,

clarifies that the financial statement notes are included within the scope of the audit, and

requires auditors to disclose the year they began serving consecutively as the company’s

auditors. For large accelerated filers in 2019 and smaller PCAOB clients in 2020, auditors must

begin identifying and discussing critical audit matters. These are the issues that arose during the

audit that involved “especially challenging, subjective or complex auditor judgment.”When AS

3101’s reporting requirements are completely implemented, American audit reports will

change from three or four paragraphs of standardized boilerplate language to a longer, much

more flexible report describing the specific judgments and procedures unique to each client.

16 COSO’s Updated Enterprise Risk Management Framework—A Quest For Depth

And Clarity

Kyleen Prewett and Andy Terry

In 2004, COSO published its first comprehensive guidance on enterprise risk management

(ERM) - Enterprise Risk Management —Integrated Framework. Then, in June of 2017, COSO

released a new, more detailed and complex ERM framework titled Enterprise Risk

Management—Integrating with Strategy and Performance. This article examines the

relationship between ERM and internal control, and then examines the similarities and

differences between the 2004 and 2017 COSO ERM Frameworks. While little is new in the

2017 Framework, its focus on the integration of ERM with strategy-setting and performance

and deeper recognition of the role of governance and culture provides a comprehensive

framework and impetus for firms to be intentional about integrating these important concepts.