The Securities and Exchange Commission gave final approval yesterday to a long-planned regulation that will require auditors to tell investors more about what they learn when they audit a company’s books, the Wall Street Journal reported today. The SEC ratified a rule that the Public Company Accounting Oversight Board passed in June that will require auditors to inform investors about “critical audit matters” — any areas of a company’s finances that the auditors found especially challenging or complex or which forced them to make tough judgment calls. The new information will be part of an expanded audit report, the letter in every company’s annual report in which the auditor passes judgment about whether the company has accurately presented the numbers on its financial statements. The audit report will retain its current pass-fail model, but will add the information about critical audit matters as well as other new material such as how long an auditor has worked for a company.
