The percentage of reports with critical audit matters in 2024 remained the same from the prior year, and the average number of CAMs per report decreased to 1.27.
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However, the number of CAMs per opinion has been steadily decreasing since 2020 with 1.51 average CAMs per report to 2024 with 1.27. Accordingly, the frequency of opinions with only one CAM has been increasing every year. In 2024, 77% of opinions with CAMs only had one critical audit matter, 19% of opinions with CAMS had two, and only 3% of opinions with CAMs had three.
Revenue from customer contracts remains the most common CAM topic across all opinions since 2020, representing 14% of all CAMs. (The FASB standard ASC Topic 606, Revenue from Contracts With Customers, was a significant change in generally accepted accounting principles.) In 2024, revenue from customer contracts represented 17% of CAMs. Allowance for credit losses, goodwill, and business combinations were the second, third and fourth most common topics in 2024, representing 9%, 9% and 6%, respectively.
The percentage of going concern opinions with CAMs decreased by one point in 2024 to 37%. A going concern is issued when there is substantial doubt about an entity’s ability to meet its obligations and continue its business for a reasonable period of time.
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