On August 13, 2013, the Public Company Accounting Oversight Board (“PCAOB”) proposed for public comment two audit standards that would lead to significant changes to the auditor’s reporting model for public companies, including investment companies. The proposal retains the current pass/fail model and the basic elements of the current auditor’s report, but requires that auditors communicate more audit-specific information (among other changes). Most significantly, the new proposal would require the auditor to include in the auditor’s report “critical audit matters” unique to each audit. The required communication regarding critical audit matters would focus on the matters the auditor determined require the most difficult, subjective, or complex judgments; those issues that posed the greatest difficulty in obtaining appropriate evidence for the auditor; and matters that posed the greatest difficulty to the auditor in forming an opinion on the financial statements. Other new requirements for auditors would include a proposed extension of the auditor’s responsibility for “other information” included in certain annual reports. “Other information” filed by an investment company on Form N-CSR would include, for example, the Code of Ethics, the Management’s Discussion of Fund Performance, and the Expense Example. The PCAOB highlighted factors unique to investment companies that would affect the implementation of the proposal, including how disclosure for affiliated funds may be included in the same N-CSR filing and how master-feeder funds and funds-of-funds may include funds that are not affiliated, have different auditors, and/or have different fiscal year ends. Comments on the proposal are due by December 11, 2013. If approved by the SEC, the proposal would be effective for audits of financial statements beginning on or after December 15, 2015.