PCAOB Group Seeks Input On the Most Decision-Useful CAMs or KAMs

Calling all public company executives, board members, auditors, financial analysts, and investors: The Public Company Accounting Oversight Board’s Investor Advisory Group (IAG) needs a favor.

The IAG said during its April 24 meeting that it’s seeking nominations for the most decision-useful critical audit matter (CAM) or key audit matter (KAM) contained in public company audit reports included in 2023 Form 10-Ks and Form 20-Fs.

A CAM is defined by the PCAOB as “any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex auditor judgment.”

A KAM is defined as “those matters that, in the auditor’s professional judgment, were of most significance in the audit of the financial statements of the current period.” KAMs are selected from matters communicated with those charged with governance. Examples of KAMs include:

Significant estimates
Significant unusual transactions
Certain types of revenue
Goodwill and other intangible assets
Gain or loss contingencies
Areas with internal control deficiencies

All nominations will be reviewed and evaluated by the IAG. The group will then select what it believes to be the top three decision-useful CAMs or KAMs for 2023 among those nominated—and they will be identified and discussed in a report released by the IAG later this year.

Each nomination, which may be submitted anonymously, should include an explanation (no more than 500 words) of why the nominated CAM or KAM provides decision-useful information to investors.

The IAG has set a June 30 deadline for nominations to be submitted. More information on how to submit your favorite CAMs and KAMs can be found here.