Volume 3, Issue 2

February 2009

I. Fornelli Article Featured on the Icahn Report

A guest article, “Improving Transparency, Regaining Investors’ Trust,” by CAQ Executive Director Cindy Fornelli was published on January 28 on The Icahn Report, the blog of Carl Icahn. Icahn, the noted investor and chairman of Icahn Enterprises, a diversified holding company, started the blog last year to generate and discuss ideas on corporate governance. The article, part of a featured series of articles by issue experts, covers the potential impact of the financial crisis and the arrival of a new president on the financial regulatory system. Fornelli details the lessons the CAQ learned about audit quality and financial reporting from investors on its Public Dialogue Tour. As Fornelli writes, “No one is more important than the person who puts his or her cash at risk by investing in the capital markets.” Fornelli observes that discussions on how best to fix the regulatory system must protect the interests of investors through greater transparency and by protecting independent standard setters from external political pressure.

II. CAQ Hosts Risk Assessment Webcast

The Center for Audit Quality hosted a webcast on Jan. 7 entitled “Risk Assessment by Auditors: The PCAOB’s Proposed New Standards.” Cindy Fornelli moderated a panel discussion with Tom Ray, Chief Auditor of the Public Company Auditing Oversight Board (PCAOB) Chief Auditor and Keith Wilson, the PCAOB’s Associate Chief Auditor.

Joining Cindy Fornelli (center) for the CAQ’s January 7 webcast on risk assessment were Keith Wilson (left) and Tom Ray of the PCAOB.

During the hour-long webcast, several hundred viewers learned about the PCAOB’s proposal to improve the existing framework for the auditor’s assessment of and response to risk in an audit. According to the panelists, the detection of fraud is a central objective of an audit of financial statements, and the new standards attempt to formally integrate fraud detection and deterrence into the auditing process. The proposed standards reflect common practices already in place.

The PCAOB is accepting comments on the proposed changes on risk assessment until February 18, 2009. Additional information is available on the PCAOB website.

The archived webcast is available online.

III. Fornelli Addresses Regulatory Landscape on AICPA Webcast

Cindy Fornelli joined with AICPA’s Mark Peterson, KPMG’s Tom Stout, Martin Sullivan of Tax Analysts and moderator John Hudson for a webcast, “The Election is Over…Now What?” Focusing on potential changes to regulation of the financial markets, Fornelli told viewers it’s safe to say that under any potential regulatory regime, shareholder interests should be a top priority. She said recent events have underscored the absolute necessity to identify a regulator or regulatory function that is either exclusively or primarily focused on investor protection.

The archived webcast is available the AICPA website.

IV. Former PCAOB Official Joins the CAQ

The CAQ is pleased to welcome Mary Moore Hamrick as Director of External Relations & Strategic Planning. Hamrick comes to the CAQ from the PCAOB, where she served as the Director of the Office of External Relations, directing the Board’s government relations and public affairs functions.

Hamrick is an experienced public policy strategist who will guide the CAQ’s communication and partnership with stakeholders interested in audit quality. Cindy Fornelli said in a statement, “Mary Moore’s wealth of experience, combined with a unique understanding of the public company auditing profession, will benefit us in countless ways as we work to serve investors and other capital market participants.”

Hamrick’s arrival at the CAQ is profiled in the February issue of Treasury & Risk magazine.