CAQ Releases Tool for Audit Committees Regarding Form AP Disclosures
A new CAQ tool can aid audit committee members in their understanding of new auditor disclosure requirements regarding audit participants. Form AP – Auditor Reporting of Certain Audit Participants: A Tool for Audit Committees is intended to: (1) assist audit committees in discussing the role of audit participants with their engagement partner and company management; and (2) help prepare audit committee members to anticipate potential questions that may arise as a result of these new disclosures.
To those ends, the tool provides a summary of Form AP disclosure requirements—which were adopted by the Public Company Accounting Oversight Board (PCAOB) in 2015 and approved by the Securities and Exchange Commission (SEC) in May 2016—as well as suggested questions regarding disclosure of the engagement partner and participation of other accounting firms.
Visit the CAQ website for more tools, videos, and other resources for audit committees.
PCAOB Seeks SAG Nominations
The PCAOB announced that it is accepting nominations for the 2018-2020 term of its Standing Advisory Group (SAG).The SAG advises the PCAOB on the development of auditing and related professional practice standards. The group meets two or three times a year and is chaired by the PCAOB Chief Auditor and Director of Professional Standards.
According to the announcement, SAG nominees should have expertise in accounting, auditing, corporate finance, corporate governance, or investing in public companies. The PCAOB also is seeking nominees with experience in auditing or financial reporting for broker-dealers and smaller public companies. The deadline for submissions is August 12, 2017.
CAQ Alert Urges Auditor Focus on Disclosures of Upcoming Accounting Changes
A June 2017 CAQ alert encourages CAQ members to focus on evaluating the adequacy of management’s disclosure of impending changes in accounting principles. The alert, SAB Topic 11.M – A Focus on Disclosures for New Accounting Standards, addresses requirements that registrants discuss, in their interim and annual SEC filings, the potential effects of recently issued accounting standards.
"The new revenue recognition, leases, and credit losses accounting standards become effective over the next few years, and these new accounting standards are expected to present significant changes for many companies," says the alert. Even in situations where a new accounting standard is not expected to significantly impact a registrant’s primary financial statements, the alert adds, the accounting standard’s requirements related to footnote disclosures may still be a significant change.
Find this alert and others at the CAQ's alerts page.
Video: Fornelli Provides Insights for Boards on Addressing Financial Reporting Fraud
What is the board’s role before, during, and after an incident related to financial reporting fraud? In this June 2017 episode of "Inside America's Boardrooms," CAQ Executive Director Cindy Fornelli joins host TK Kerstetter to discuss.
Fornelli outlines best practices for early detection and guidelines for self-reporting to the SEC. She also directs viewers to helpful resources, including the Anti-Fraud Collaboration's 2017 report, Addressing Challenges for Highly Subjective and Complex Accounting Areas.
Accounting Policy Meets ICFR: Register Now for Free July 11 Webcast
Effective accounting policies and internal controls are key for stemming fraud and reducing the number of financial restatements. So how can companies improve in these two areas? Hosted by the Anti-Fraud Collaboration, this July 11 webcast will highlight leading-practice recommendations from top company executives, corporate directors, and auditors.
The webcast will also address the importance of creating accounting policies and controls, crafted through risk-based evaluations, that can be easily understood by non-accountants. Register today for this program, which is free of charge and eligible for 1.8 CPE credits and 1 NACD credit.
Professors Carmichael and Palmrose Appear on "Profession in Focus"
In June, the CAQ posted two new "Profession in Focus" episodes, each featuring guests hailing from academia. Appearing in Episode 46 is Douglas R. Carmichael, the Claire and Eli Mason Professor of Accountancy at Baruch College's Zicklin School of Business. Carmichael reflects on the Sarbanes-Oxley Act of 2002, the impact of technology on fraud deterrence, and why professional skepticism is critical for auditors. "It’s almost impossible to just look at someone and say, 'Ah, this is a fraudster,'" says Carmichael. "That’s why the mindset is so important."
Episode 47 of the program features Zoe-Vonna Palmrose, Professor of Accounting and the Kermit O. Hanson Professor in Business Administration at the University of Washington's Foster School of Business. Palmrose, a member of the CAQ's Research Advisory Board, discusses the benefits of internal control over financial reporting, the importance of evidence-based rulemaking, and the imperative "that auditors continue to grow and learn"—especially in these times of change and innovation for the public company auditing profession.
Join the CAQ at These Upcoming Events
American School Counselor Association Conference
The CAQ is excited for the 2017 ASCA Conference in Denver! Stop by booth #221 to learn more about resources on DiscoverAudit.org and discover the opportunities the audit profession has for bright students.
July 8-11, 2017; Denver, CO (Website)
Anti-Fraud Collaboration Webcast
Join the Anti-Fraud Collaboration for a webcast on, “What is Your Role? When Accounting Policy Meets ICFR”. The webcast features panelists Brian Croteau, Partner at PwC, LLP; R. Karl Erhardt, Executive Vice President and Chief Auditor at MetLife; Suzanne Hopgood, President and CEO at The Hopgood Group; Linda Zukauckas, EVP, Corporate Controller at American Express; and moderator Cindy Fornelli.
July 11, 2017 (Register Here)
American Accounting Association Annual Meeting
Join the CAQ at the AAA Annual Meeting in San Diego where Cindy Fornelli will moderate an August 7 panel discussion with Jeanette Franzel, Board Member at the PCAOB; Maria Moats, Assurance Leader at PwC, LLP; and Chris Smith, Global Head of Audit and Accounting at BDO. The topic is “Materiality – Do We Know It When We See It?” And stop by booth #23 in the Exhibit Hall to learn more about DiscoverAudit.org.
August 6-8, 2017; San Diego, CA (Website)
Equilar Board Leadership Forum
The CAQ is proud to sponsor Equilar and Nasdaq’s Fifth Board Leadership Forum. Cindy Fornelli will be joined by Michael Garland, Assistant Comptroller, Office of NY City Comptroller; Drew Hambly, Executive Director, Morgan Stanley Investment Management; and Sonia Lurie, Proxy Voting Officer, Dodge & Cox, for a discussion around what investors want to see from directors. Registration is now open.
September 12, 2017; New York, NY (Website)
Council of Institutional Investors Fall Conference
The CAQ is pleased to continue its partnership with the Council of Institutional Investors as a sponsor of its 2017 Fall Conference, where we’ll be part of “The Audit Committee in Action” simulation on September 14.
September 13-15; San Diego, CA (Website)