The Center for Audit Quality

Volume 2, Issue 1

January 2008

I. CAQ Testifies at Los Angeles Hearing of Treasury Advisory Committee

As part of an ongoing effort to assist the Treasury Department’s Advisory Committee on the Auditing Profession, CAQ Executive Director Cindy Fornelli testified on Feb. 4 at a hearing in Los Angeles on a panel discussing human capital issues. In written testimony, Fornelli urged the committee to support efforts to develop a professional judgment framework for auditors. She also outlined steps to ensure that the profession continues to have an adequate supply of well-qualified, highly-trained job candidates.

Philip Reckers, a professor of accounting at Arizona State University, endorsed Fornelli’s suggestion that academia and the profession should work together to encourage professors to use sabbaticals to work with audit firms. When questioned about the ways in which the profession could aid academia in faculty shortages, Fornelli testified, “We are all looking for ways to have a more collaborative process. … We need to find ways to partner so that it’s a two-way street.”


Fornelli was joined at the Advisory Committee hearing by two members of the CAQ's governing board: Barry Salzberg, CEO of Deloitte LLP (above) and Edward E. Nusbaum, CEO and Executive Partner of Grant Thornton LLP (right). Another CAQ member offering ideas and insights in Los Angeles was Neal Spencer, managing partner at BKD, LLP.

To listen to the full audiocast of the hearing, click here.

II. Public Dialogue Tour Goes to Texas

Is everything really bigger in Texas? Well, it was for the CAQ’s Public Dialogue Tour, hosting the biggest event yet on February 5 in Dallas. Investor demand for good corporate governance and the risks of investing overseas were two of the topics covered in the wide-ranging discussion at the latest stop on the Tour.

Charles Niemeier, a member of the Public Company Accounting Oversight Board and a panelist at the Dallas event, said the adoption of globally accepted auditing standards would not automatically change regulatory and business cultures in high-risk countries. He said investors seeking profits in other countries face far more risk than investors in U.S. companies.

“They do not have the controls we have. They do not have the enforcement in place,” he said. “It’s not going to be solved by having the same standards. … What it comes down to is we have different cultures of operation, and they’re going to view those standards very differently.”

Niemeier and the other panel members — James Keyes, chairman and CEO of Blockbuster, Inc.; Ross Perot Jr., chairman of Perot Systems Corp.; and Dan Short, dean of the M.J. Neely School of Business Administration at Texas Christian University in Fort Worth — shared their thoughts in a 90-minute exchange with an audience of investors and other market stakeholders. The Feb. 5 forum was the eighth stop on the Public Dialogue Tour.

Next stop: Boston, April 8.

III. CAQ Issues Member Alerts

To keep members up-to-date on regulatory developments, the CAQ issued three member alerts in January. The alerts offer guidance on the applicability of Appendix K and FAS 140 in certain cases, and provide advice for foreign private issuers who want to early-adopt the SEC’s rule eliminating the requirement for U.S. GAAP reconciliation.

Broad-based member alerts are often posted on the Web site. The Web site also features the latest news on audit issues from the national media.