Volume 3, Issue 3

March 2009

I. CAQ and Other Stakeholders Caution Against Retreat from Fair Value

The CAQ joined with the CFA Institute, Consumer Federation of America and Council of Institutional Investors to send letters to Congress and administration officials cautioning against a retreat from fair value accounting.

“We are writing to applaud your efforts to restore investor confidence in the U.S. capital markets during this time of extreme uncertainty,” the organizations wrote on Feb. 13. “As you seek solutions, we caution against taking action that could further undermine the confidence of investors.”

BNA Daily Report for Executives (“Trade Groups Urge Geithner Not to Tamper With Fair Value Accounting in Rescue Plan,” Feb. 18) noted, “The four trade groups, which have teamed up previously in defense of fair value accounting, sent separate letters to Treasury and to lawmakers making the same point—that neither Congress nor the administration should interfere with the existing standards-setting apparatus, and that accounting standards ought not be fudged to make ailing financial institutions look better.”

II. CAQ Offers “Lessons Learned” From Internal Control Audits

The CAQ on Feb. 9 issued CAQ Lessons Learned – Performing an Audit of Internal Control in an Integrated Audit, a new reference tool for public company auditors. The report identifies 21 practical insights for auditors performing an integrated audit, notes the benefits of a top-down, risk-based approach to emphasize areas where material risks are most likely, and also the advantages of maintaining an open line of communication between the auditor, company management and the audit committee.

The CAQ assembled a task force comprised of auditors with extensive experience with performing integrated audits of both accelerated and non-accelerated filers to develop lessons that will help smaller auditing firms more effectively and efficiently implement integrated audits for the first time. “Sharing experience across the profession enables auditors to serve investors even more effectively by enhancing the quality of internal controls and audits,” CAQ Executive Director Cindy Fornelli said.

III.“Year In Review” Recaps CAQ’s 2008 Journey

The CAQ recently marked its second anniversary with the release of its 2008 “Year In Review,” a report on the Center’s activities and accomplishments throughout the year that just passed. The “Year In Review,” distributed to our membership and other stakeholders with an interest in audit quality, highlighted the continued growth of the CAQ as an important voice for investors, public company auditors and the markets. “The economic and political landscape shifted dramatically during the [CAQ’s] second year of operation, but our focus never changed. The events of the past year only strengthened our commitment to serve investors and assist the public company auditing profession in its vital role of fostering investor confidence,” Cindy Fornelli pointed out to readers.