The Public Company Accounting Oversight Board (PCAOB) has proposed revising the auditor's report that appears at the end of public company financial statements in an effort to make it less of a pass-fail exercise.

A study by the American Accounting Association (AAA) suggests the current audit letter is basically a rubber stamp. In one survey, 53,834, or 62%, of the auditors' reports examined were unqualified, 32,337, or 37%, were unqualified with emphasis on a matter, and only 32, or 0.04%, were either qualified, adverse or no opinion. The AAA's comment letter on the proposed change described the reports as mostly "standard or 'boilerplate' wording."

To address that shortcoming, the PCAOB is discussing several changes. It wants to encourage the auditor to include discussion and analysis, which could cover such topics as audit risk and audit procedures, and it is proposing required or expanded use of emphasis paragraphs, which highlight matters of importance in the company's financial statements.