Question

Please help assist:

View the attached pictures with the lecture on additional disclosures from auditors.

Analyze (in fewer than 150 words) these mandatory additional disclosures.
You can take the perspective of the investor, auditor, or the company.
Logically argue your case.

Please Search for, and cite, information sources, and those found in the article. Whenever you can, give real-world examples
    to support your commentary.

The federal regulator that polices accounting firms is proposing a major overhaul of how company audits are reported to the public, a move that could provide investors with deeper insight into the health of corporations. For more than 70 years, auditors have had to provide only relatively superficial opinions about what they see when delving into companies' books. But that would change under new rules that the Public Company Accounting Oversight Board proposed on Tuesday. The board wants accounting firms to include a potentially large amount of new information in the audit report that is attached to a company's annual report. For instance, an auditor would have to explain where it found it difficult to form judgments about a company's books. That difficulty might stem from the complexity of the company's financial statements, or from a lack of evidence to support management's estimates of an accounting item. The proposal is one of the most ambitious initiatives to come from the oversight board, which was set up 10 years ago after devastating accounting scandals at large companies revealed serious shortcomings at auditing firms. "The proposed standards to enhance the auditor's reporting model mark a watershed moment for auditing in the United States," James R. Doty, the chairman of the oversight board, said in a statement. He added that the new rule “would make the audit report more relevant to investors."

Answer 1

The Public Company Accounting Oversight Board today released a report on inspection observations of registered audit firms' initial implementation of and compliance with the PCAOB auditing standard on Communications with Audit Committees, describing that in 93 percent of the audits inspected in 2014 for which the standard applied, no failures to comply with the requirements were identified. Preliminary results from 2015 inspections show similar results. According to the report, PCAOB inspectors found that most firms inspected in 2014 had incorporated the requirements of the standard (AS No. 16/AS 1301) into their audit methodologies, introduced relevant practice aids, or provided training to their partners and staff. "The communication between an audit firm and the audit committee is fundamental to a reliable and high quality audit. I encourage auditors and audit committee members to read this report carefully," said PCAOB Chairman James R. Doty. Inspections staff identified deficiencies in complying with the new standard in 7 percent of the relevant audits inspected. Those deficiencies did not by themselves result in an insufficiently supported audit opinion, but nevertheless constituted departures from the requirements of the standard and indicated a potential defect in firms' systems of quality control. Inspections staff also identified deficiencies related to other PCAOB rules and standards requiring communications with audit committees, such as communications concerning independence.

During interviews with inspections staff, audit committee chairs generally indicated that effective two- way communication with their auditors had occurred. Some audit committee chairs noted that after the effective date of the standard, there had been improvements in the robustness and formality of communications with their auditors, including more in-depth discussions with the auditor about audit progress, significant risk areas, and audit findings. Other audit committee chairs noted that their auditors had been communicating the matters required under the standard even before the standard came into effect and, accordingly, they had not observed a significant change in their communications with their auditors in 2013. The report, Inspection Observations Related to PCAOB Rules and Auditing Standards on Communications with Audit Committees, covers the PCAOB's 2014 and preliminary 2015 inspection results. The standard became effective for audits of fiscal years beginning on or after December 15, 2012.