We have now completed the end-end linkage to make the audit opinions available for download automatically.  Specifically we have connected all of the code pieces that were required to identify the 10-K filings made by Large Accelerated Filers, extract the audit opinion from the filing and then push it to the server that handles your requests when submitted.  Because of the nature of the resources we are using these reports are currently available around 3:00 AM the morning after they are filed. That is if any are filed on Monday – the audit reports should be available to you at around 3:00 AM on Tuesday.

We are also working on providing a summary of the Critical Audit Matters described in the opinions as well as additional meta-data about the opinion.  If you would like to review the current status of this summary detail please follow this link (CAM_SUMMARY).  Below is an image of the current data columns in this file (columns A-E have meta-data that can be used to tie these details back to the actual 10-K filing where the opinion was found

We are specifically identifying the nature of the type of audit opinion (REPORT_TYPE) where the CAM are described (FINANCIAL or COMBINED where COMBINED includes both the opinion on the financial statements as well as the opinion on internal control).  We are also indicating the nature of the opinion and if an exception is noted then it will be reported in the EXCEPTION column.  CAM_COUNT is an integer that indicates the number of CAM listed in the opinion.  And then finally we are currently listing the title the auditor uses to describe the CAM.

Here are some fun facts (only accounting researchers/faculty would call these fun facts) from our initial analysis:

Distribution of CAM counts by registrant:

Five audit reports made mention of 4 CAMs, and 20 listed 3.  Here are the five registrants whose audit reports listed four CAM:

The most common CAM address measurement and impairment issues related to intangible assets (Goodwill generally but also the allocation across various types of intangible).  Both tax and revenue issues are also very prominent in the collection.  I think what surprised me the most is that there are mentions of inventory valuation issues in eight of the opinions.  I am not sure why I am surprised by this as our profession has roots in several frauds involving massive inventory misstatement.

We are isolating the CAM with the plan to create a separate file for each CAM mentioned in an opinion.  We have some ideas as to why this separation will be useful – but more on that later.  We are also developing a standardized taxonomy with the intention of delivering both the original language of the CAMs as described by the auditor and a more parsimonious description that would make using these as inputs to empirical models a bit simpler.  To make this a bit clearer – here are four descriptions of Goodwill Impairment Assessments

A scan of these suggests these are all similar in nature and could be standardized to allow better sorting and coding.