Volume 4, Issue 8

August 2010

I. CAQ Welcomes Angela Desmond and Allison Patti

The Center for Audit Quality has welcomed two new senior directors – Angela Desmond and Allison Patti – to its staff.

Ms. Desmond, a former Public Company Accounting Oversight Board (PCAOB) and Federal Reserve Board official, joins the CAQ as Senior Director of External Relations. She comes to the CAQ from Corporate Risk Advisors LLC, a D.C.-based consulting and strategic advisory firm specializing in the financial services industry, where she was a managing director. Before joining Corporate Risk Advisors, Ms. Desmond served as Chief of Staff for the PCAOB from September 2006 until August 2009. She also acted as the PCAOB’s Interim Chief Administrative Officer. Prior to joining the PCAOB, she was a member of the Federal Reserve Board’s official staff.

CAQ Senior Directors Angela Desmond (left) and Allison Patti (right) meet with Executive Director Cindy Fornelli

Ms. Patti is the CAQ’s new Senior Director of Professional Practice, Policy & Research. A partner at Deloitte LLP and a former Professional Accounting Fellow in the Office of the Chief Accountant at the U.S. Securities and Exchange Commission (SEC), she is the second participant in the CAQ’s professional practice fellowship program, which is conducted in collaboration with the CAQ’s member firms. Ms. Patti succeeds the inaugural CAQ fellow, Josh K. Jones of Ernst & Young LLP, who is assisting her as she transitions into the role.

II. Recent CAQ Alerts Summarize Second Quarter Regulatory Pronouncements and Auditing-Related Provisions of Dodd-Frank Act

The CAQ often produces alerts to inform members about regulatory developments and other matters affecting the public company auditing profession.

On July 8, the CAQ issued an Alert summarizing and providing links to recently-issued FASB, SEC and PCAOB pronouncements that became effective in the second quarter of 2010, on matters including foreign currency exchange rates, healthcare reform, the Sarbanes-Oxley Act and various financial reporting issues. In a July 20 Compliance Week story, Tammy Whitehouse wrote that the update “just might be a lifesaver.”

The CAQ also issued an Alert reporting on accounting and auditing-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law on July 21.

III. Coming Soon: CAQ’s “Main Street Investor Survey”

For the fourth consecutive year, the CAQ is conducting its “Main Street Investor Survey” to gauge the views of individual investors on their confidence in the U.S. capital markets and audited financial information, as well as to measure changes in their investing behavior.

This year’s survey explores several new topics, including the usefulness of investment information, including financial reports released by publicly-traded companies; measures put into place to make another financial crisis less likely; and exempting smaller companies from compliance with Section 404(b) of the Sarbanes-Oxley Act.

Look for the results of the CAQ’s “Main Street Investor Survey” in September. To familiarize yourself with past surveys, visit http://www.thecaq.org/resources/caqresearch.htm.

IV. CAQ Questions Washington Post Story about Audit Quality

The CAQ has taken exception with a story in The Washington Post that questioned the effectiveness of the PCAOB.

In a July 15 letter to the editor, Executive Director Cindy Fornelli wrote,
“I wholeheartedly agree with David Hilzenrath’s observation that “outside auditors play a crucial role in the nation’s financial system” (‘Critics question effectiveness of auditing oversight board,’ July 11). However I do not believe that Mr. Hilzenrath’s article adequately considers the significant positive impact the PCAOB has had on the public company auditing profession, and more importantly, investor confidence.”

The letter quoted from the amicus brief of the Council of Institutional Investors to the U.S. Supreme Court in Free Enterprise Fund, et al. v. PCAOB which observed that, “In contrast to the patchwork, voluntary system [the PCAOB] replaces, concentrating those governing functions in a single, authoritative body promises greater clarity for auditors and issuers regarding the rules in which they must operate and enhances the investing public’s understanding of the rules that are followed in generating the statements on which those investors must rely.”

Fornelli went on to write that PCAOB oversight, “has contributed to advancements in audit quality and caused stakeholders to have more confidence in the financial reporting system.”