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The continuing focus on lessons learned from the global financial crisis has prompted the Public Company Accounting Oversight Board (PCAOB) to release two landmark proposals designed to address longstanding criticisms of auditor reporting. As critics grew more vocal in the aftershocks of the severe economic upheaval and unexpected business failures of 2008 and 2009, the PCAOB responded with a multi-year study of the pros and cons of various potential changes. Today's proposals have been years in the making, and they pave the way for the first major changes in decades in the content of the audit reports issued by independent auditors of public companies.
This Messenger summarizes the proposals, expected benefits, and open questions. The appendix shows an example of how audit reports might look in the future.