Volume 3, Issue 5

May 2009

I. New CAQ Publication Explains the Public Company Audit Process

The Center for Audit Quality has published the Guide to Public Company Auditing, an introduction to and overview of the key processes, participants and issues related to public company auditing. Presented in a straightforward, easy-to-use format, the Guide to Public Company
Auditing demonstrates to market participants the important role public company auditing has in financial reporting, which helps give individuals and institutions the confidence to invest in public companies.

Written with the layperson in mind, the Guide provides answers to the most frequently asked questions about, and topics related to, public company auditing, including:

• The relationship between company management, the audit committee and the auditors
• Audit team composition
• Steps in the audit process
• Finding fraud
• Auditor independence

The Guide to Public Company Auditing is available on the CAQ’s website. Printed copies are available by contacting Jake Leon at jleon@thecaq.org.

II. CAQ Launches Educational Webcast Series on AS 5 Implementation

On May 28, the CAQ will hold the first in a 3-part series of webcasts on the implementation of PCAOB Auditing Standard No. 5 (AS 5), An Audit of Internal Control Over Financial Reporting That is Integrated with An Audit of Financial Statements.

Under AS 5, auditors of public companies have to file an opinion stating whether the company maintained, in all material respects, effective internal control over financial reporting. Previously, only large public companies were required to file the opinion, but as of December 15, 2009, AS 5 will apply to all public companies.

In keeping with its mission to enhance audit quality, the CAQ is launching the educational series to help auditors of smaller public companies who will comply with AS 5 for the first time. The first webcast will cover the following topics:

• An overview of key resources for auditors of smaller public companies;
• Using a top-down, risk-based approach;
• Discussing the unique challenges of smaller, less complex companies;
• Communicating and coordinating with management;
• Integrating the audits; and
• Establishing the right team.

Please click here to register for the May 28 webcast.

III. IFRS: Demand for Global Accounting Standards Grows

The current global economic crisis further demonstrates the need for a single set of high-quality global accounting standards, the CAQ said in an April 9 IFRS comment letter to the SEC. The CAQ offered a series of observations and suggestions on improving the SEC’s IFRS Roadmap, including the need for a date certain for the global accounting standards to reinforce the SEC’s commitment to moving U.S. domestic registrants to IFRS.

In the months ahead, the CAQ will be active in educating market stakeholders on the opportunities and challenges presented by IFRS, including a May 15 Standard & Poor’s forum during which CAQ Executive Director Cindy Fornelli will speak on the topic.

IV. CAQ Issues RFP for Audit-Related Research Projects

As part of its ongoing efforts to provide opportunities for active engagement between the academic community and the profession, the CAQ issued a request for proposals (RFP) for research on topics related to auditing. Working through its Research Advisory Board , the CAQ requested proposals for projects that address the following topics:

• Audit quality
• Professional judgment
• Professional skepticism
• Value of the audit

ComplianceWeek noted that the CAQ hopes to increase the number of academics conducting research on accounting and auditing. “One of the things we’ve heard from a number of academics is that researchers have a difficult time getting funding. Academics need vehicles in order to do robust research,” Cindy Fornelli told the publication.

The deadline for submissions is May 15, 2009. Please view the release announcing the RFP for more details.