A CAM is a Critical Audit Matter and a KAM is a Key Audit Matter. Both describe, in the audit report, the matters that took the most difficult judgment during the audit. CAMs come from PCAOB standard AS 3101 and apply to U.S. public company audits. KAMs come from ISA 701 and apply to audits under International Standards on Auditing.
They are close cousins rather than the same thing. A CAM must relate to accounts or disclosures material to the financial statements and involve especially challenging, subjective, or complex auditor judgment. A KAM is simply a matter that, in the auditor's professional judgment, was of most significance in the audit.
Neither is a warning, a qualification, or a separate opinion. Both describe where the audit was hardest, not where the company went wrong.
Last reviewed and updated: September 2026
First, a Disambiguation
What Does CAM Stand For in Finance and Accounting?
CAM has two common meanings in finance, and search results mix them together constantly. Which one you want depends on whether you are reading an audit report or a commercial lease.
Critical Audit Matter
A disclosure in the independent auditor's report under PCAOB standard AS 3101, describing a matter that required especially challenging, subjective, or complex judgment during the audit.
This is the meaning used throughout the rest of this guide.
Common Area Maintenance
The charges a commercial tenant pays toward shared costs such as parking, landscaping, security, and lobby upkeep, usually reconciled annually against an estimate.
Nothing to do with auditing. If you arrived here from a lease question, see our real estate accounting practice.
A third acronym sometimes collides with these. CAMS, with an S, often refers to the Certified Anti-Money Laundering Specialist credential, which is unrelated to both meanings above.
Critical Audit Matters
What Is a Critical Audit Matter?
A critical audit matter is a matter arising from the current period audit that the auditor communicated, or was required to communicate, to the audit committee, and that meets two further tests. It must relate to accounts or disclosures that are material to the financial statements, and it must have involved especially challenging, subjective, or complex auditor judgment.
The auditor applies both tests together. A matter can be difficult without touching a material account, and it can touch a material account without being difficult. Only the overlap becomes a CAM.
The concept arrived with PCAOB Auditing Standard 3101, approved by the SEC in October 2017. It marked the biggest change to the U.S. auditor's report in more than seventy years, replacing a largely standardised pass-or-fail document with one that explains where the work was hardest.
What a CAM is not
- Not a qualification or a modified opinion. The auditor states the opinion separately, and it remains unqualified.
- Not a deficiency, a misstatement, or a control finding.
- Not a separate opinion on the matter itself. The auditor is describing the audit, not issuing a second verdict.
- Not new information about the company. A CAM points to accounts and disclosures already in the financial statements.
That last point matters commercially. Investors sometimes read a CAM as a red flag on first encounter. It is closer to the opposite: a map of where the auditor concentrated effort.
Preparing for your first audit under PCAOB standards?Knowing which areas will likely become CAMs before the auditor names them changes how you prepare. Talk to our audit team →
Key Audit Matters
What Is a Key Audit Matter?
A key audit matter is a matter that, in the auditor's professional judgment, was of most significance in the audit of the current period financial statements. KAMs come from International Standard on Auditing 701, issued by the International Auditing and Assurance Standards Board and effective for periods ending on or after 15 December 2016.
ISA 701 sets out a two-step process. The auditor first identifies matters communicated with those charged with governance that required significant auditor attention. From that set, the auditor then selects those of most significance to the audit. Those become the KAMs.
The ISAs require KAMs for audits of listed entities. Auditors may also report KAMs voluntarily for other entities, or where law or regulation demands it.
Where you will see KAMs
- Audits performed under International Standards on Auditing rather than PCAOB standards
- Listed companies in the United Kingdom, European Union, Australia, Canada, and many other jurisdictions
- Group audits where a component sits in an ISA jurisdiction
- Companies dual-listed across a U.S. exchange and an international one, which can produce both a CAM report and a KAM report
The Comparison
CAM vs KAM: What Actually Differs.
Both standards emerged around the same time and share most of their architecture. The differences are narrow but they matter, particularly for companies reporting in both regimes.
| CAM (Critical Audit Matter) | KAM (Key Audit Matter) | |
|---|---|---|
| Standard | PCAOB AS 3101 | ISA 701 (IAASB) |
| Applies to | Audits conducted under PCAOB standards, meaning U.S. public companies | Audits under International Standards on Auditing, required for listed entities |
| Effective from | Fiscal years ending on or after 30 June 2019 for large accelerated filers, 15 December 2020 for other applicable companies | Periods ending on or after 15 December 2016 |
| Definition test | Two tests, both required: relates to a material account or disclosure, and involved especially challenging, subjective, or complex judgment | One test: of most significance in the audit, in the auditor's professional judgment |
| Materiality link | Explicit. The matter must relate to accounts or disclosures material to the financial statements | Not an explicit requirement, though significance in practice usually implies it |
| Source pool | Matters communicated, or required to be communicated, to the audit committee | Matters communicated with those charged with governance |
| If none apply | The auditor states that no critical audit matters were identified. AS 3101 anticipates at least one in most audits | The auditor states that there are no key audit matters to communicate |
A company dual-listed in the U.S. and an ISA jurisdiction can end up with both. The matters usually overlap heavily, but the wording and the selection tests differ, so each report gets prepared separately rather than translated from the other.
Scope
Which Companies Get CAMs?
CAM reporting arrived in two waves. Large accelerated filers came first, for fiscal years ending on or after 30 June 2019. All other companies to which the requirements apply, including other accelerated filers and smaller reporting companies, followed for fiscal years ending on or after 15 December 2020.
Categories outside the CAM requirement
- Emerging growth companies
- Brokers and dealers reporting under Exchange Act Rule 17a-5
- Investment companies other than business development companies
- Employee benefit plans
The exclusions catch companies out at transition. An emerging growth company that loses EGC status begins receiving CAMs in the auditor's report from that year, often without having anticipated it. Confirm your filer status and the current scope with your auditor rather than assuming last year's position carries forward.
About to lose emerging growth company status?Your next audit report will carry CAMs for the first time. Knowing which areas attract them is worth working out in advance. Talk to our audit team →
In the Report
What a CAM Looks Like in the Audit Report.
People searching for a "CAM report" are usually looking for the critical audit matters section inside a standard auditor's report, rather than a separate document. There is no standalone CAM report.
The section sits after the opinion and the basis for opinion. For each critical audit matter, the auditor must identify it, describe the principal considerations that led to determining it was a CAM, describe how it was addressed in the audit, and refer to the relevant financial statement accounts or disclosures.
"The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments."
Each matter then follows with a heading, a short description of why it qualified, and an explanation of the procedures performed.
Areas that most often become CAMs
- Goodwill and intangible asset impairment testing
- Revenue recognition, particularly around variable consideration and multiple performance obligations
- Fair value measurement of hard-to-value instruments
- Income tax positions, valuation allowances, and uncertain tax benefits
- Business combinations and purchase price allocation
- Loss contingencies and litigation reserves
- Inventory valuation and reserves in complex supply chains
The common thread is estimation. Where the number depends on management assumptions about the future, the audit work becomes judgment-heavy, and judgment-heavy work is what the standard asks auditors to describe.
Determination
How Auditors Decide What Counts.
Start with the audit committee
Both standards draw from the same pool: matters the auditor communicated, or was required to communicate, to the audit committee or those charged with governance.
Nothing outside that pool becomes a CAM or a KAM, so the quality of audit committee communication shapes the eventual disclosure.
Apply the tests
For a CAM, the matter must relate to a material account or disclosure and must involve especially challenging, subjective, or complex judgment. For a KAM, it must have been of most significance in the audit.
Auditors weigh factors including assessed risk of material misstatement, the degree of management judgment involved, the effect of unusual transactions, and the extent of specialised skill required.
Describe without disclosing
The auditor explains how the audit tackled the matter without providing original information about the company. Where a CAM would require disclosing something not already in the financial statements, management and the audit committee resolve that tension before the report goes out.
For Your Company
What CAMs Mean in Practice.
A CAM changes what readers see, not what the audit concluded. Three practical consequences follow for the companies receiving them.
Your disclosures get read more closely
A CAM points directly at specific accounts and disclosures. Analysts and investors follow that pointer. Thin disclosure in an area flagged as a CAM tends to attract questions it would not otherwise have drawn.
Documentation gets tested harder
The areas that become CAMs are where the auditor performed the most judgment-intensive work. That work rests on management's own documentation of assumptions, models, and conclusions. Weak support turns a difficult area into a slow one.
Timelines move
CAM drafting lands near the end of the engagement, often alongside the final reporting crunch. Companies seeing the draft language for the first time in the final week have less room to discuss it than those who raised the likely areas months earlier.
How GreenGrowth CPAs Helps
Audit Support for Companies Reporting Under PCAOB Standards.
Full-scope audits for public companies listed on the NYSE, NASDAQ, and OTC markets, performed under PCAOB standards.
Working out which areas are likely to attract critical audit matters, and what documentation those areas need, before the engagement begins.
Audit readiness, historical financial statement preparation, internal controls documentation, and registration statement support.
Preparing companies whose next report will carry CAMs for the first time, including estimation areas and supporting documentation.
Companies listed across a U.S. exchange and an ISA jurisdiction, where both a CAM report and a KAM report are required.
Helping committees understand what gets communicated, why it matters, and how it shapes the eventual disclosure.
GreenGrowth CPAs is a PCAOB registered public accounting firm under Firm ID 6580 and an AICPA member firm, appearing as independent registered public accounting firm in audited financial statements filed with the SEC.
Not sure which areas of your audit will attract CAMs?That question is far cheaper to answer in planning than in the final reporting week. Talk to our audit team →
Facing your first PCAOB audit?
IPO, uplisting, or losing emerging growth company status all bring CAMs into your report for the first time.
Common Questions
CAM and KAM FAQs.
Definitions
What is a KAM?
A KAM, or key audit matter, is a matter that in the auditor's professional judgment was of most significance in the audit of the current period financial statements. It comes from International Standard on Auditing 701, effective for periods ending on or after 15 December 2016, and is required for audits of listed entities under the ISAs. The auditor selects KAMs in two steps. First, identify matters communicated with those charged with governance that required significant auditor attention. Then choose those of most significance from that set. A KAM describes where the audit was most demanding. It is not a criticism of the company.
What is a CAM in auditing?
A CAM, or critical audit matter, is a disclosure in the independent auditor's report under PCAOB standard AS 3101. It covers a matter arising from the current period audit that the auditor communicated, or had to communicate, to the audit committee. That matter must relate to accounts or disclosures material to the financial statements, and must involve especially challenging, subjective, or complex auditor judgment. Both of those last two tests must be met. A CAM is not a qualification, a deficiency, or a separate opinion, and it adds no new information about the company.
What does CAM stand for in finance?
It depends on context, and the two meanings are unrelated. In auditing, CAM stands for critical audit matter, a disclosure in the auditor's report under PCAOB AS 3101. In commercial real estate, CAM stands for common area maintenance, the shared costs a tenant pays toward parking, landscaping, security, and similar building expenses under a lease. A third acronym, CAMS with an S, usually refers to the Certified Anti-Money Laundering Specialist credential.
CAM versus KAM
What is the difference between key audit matters and critical audit matters?
Both describe the matters that required the most difficult judgment in an audit, and both draw from what the auditor communicated to the audit committee or those charged with governance. The differences are in the standard and the test. CAMs come from PCAOB AS 3101 and apply to U.S. public company audits; KAMs come from ISA 701 and apply under International Standards on Auditing. A CAM must both relate to a material account or disclosure and involve especially challenging, subjective, or complex judgment. A KAM has a single test: whether the matter was of most significance in the audit. In practice the same issues usually surface under either standard.
Can a company have both CAMs and KAMs?
Yes. A company dual-listed on a U.S. exchange and in an ISA jurisdiction can receive both. The underlying matters usually overlap heavily, since the same estimation-heavy areas attract attention under either standard. The wording and the selection tests differ, so each set of disclosures gets prepared separately rather than translated from the other.
What if the auditor identifies no critical audit matters?
The auditor states in the report that no critical audit matters were identified. That said, AS 3101 anticipates that in most audits the auditor will determine that at least one matter involved especially challenging, subjective, or complex judgment. A report with no CAMs is therefore unusual for a company inside the scope, and far more common among entities the requirement never reaches, such as emerging growth companies.
What it means for companies
Is a critical audit matter a bad sign?
No. A CAM describes where the audit required the most judgment, not where the company went wrong. The opinion sits separately in the report and remains unqualified. CAMs are not deficiencies, misstatements, or control findings, and they contain nothing that the financial statements do not already disclose. Goodwill impairment testing, revenue recognition, and fair value measurement appear as CAMs constantly, simply because they depend on management assumptions about the future and that makes them hard to audit.
Which companies have to report critical audit matters?
Companies audited under PCAOB standards. Reporting began with fiscal years ending on or after 30 June 2019 for large accelerated filers, then 15 December 2020 for other applicable companies including other accelerated filers and smaller reporting companies. Several categories sit outside the requirement: emerging growth companies, brokers and dealers reporting under Exchange Act Rule 17a-5, investment companies other than business development companies, and employee benefit plans. Confirm your filer status with your auditor, since losing an exclusion brings CAMs into the report immediately.
How should a company prepare for CAMs?
Work out which areas will likely attract them and strengthen the documentation there first. The areas that become CAMs are almost always estimation-heavy: goodwill impairment, revenue recognition, fair value measurement, tax positions, and loss contingencies. For each, the auditor tests management's assumptions, models, and conclusions, so the quality of that support determines how smoothly the area goes. Raising the likely CAM areas early also gives management time to discuss the draft language, which rarely happens well in the final week of an engagement.
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This guide is general information, not advice for a specific engagement. Audit reporting requirements depend on filer status and the standards applied, so confirm your position with your auditor.
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