Volume 6, Issue 9

September 2012

I. CAQ Webcast on Communications with Audit Committees Focuses on Requirements & Leading Practices

The CAQ has announced that it will host a webcast focusing on communications with audit committees on October 24 from 2:30 to 4:00 pm (Eastern). Designed with both auditors and audit committee members in mind, this CAQ Webcast is intended to benefit both the audit committee in overseeing the financial reporting process and external audit, and the auditor in conducting a high quality audit.

Webcast panelists include representatives from the PCAOB, the audit committee community, and the audit profession. Panelists will provide an overview of required communications under the PCAOB’s recently adopted Auditing Standard 16, Communications with Audit Committees; and share unique insights and perspectives on leading practices that can be employed by both auditors and audit committees to promote robust and candid dialogue on significant audit and financial statement matters as well as PCAOB inspections results and other quality control matters.

Register now for the CAQ webcast on Communications with Audit Committees.

II. Anti-Fraud Collaboration Partners Release NACD Skepticism Webinar Series

On October 1, the National Association of Corporate Directors (NACD), the Center for Audit Quality (CAQ), Financial Executives International (FEI) , and the Institute of Internal Auditors (the IIA) will release the first in a new series of webinars on skepticism. Developed by the NACD, the webinars are designed to help members of the financial reporting supply chain – audit committees, external and internal auditors and financial executives – to expand their use of skepticism to help deter and detect financial reporting fraud.

CAQ Governing Board member Michele Hooper moderates the first skepticism webinar

The first webinar, which introduces “The Ethics and Etiquette of Skepticism,” will be moderated by audit committee chair, and CAQ Governing Board member, Michele Hooper, who will lead a discussion on exercising skepticism by creating a culture that encourages verifying information through probing questions. Joining Hooper on the panel are Mary Mitchell of The Mitchell Organization, and veteran director Bill White of Northwestern University.

The series will be rolled out over the remainder of the year and feature webinars on “ Skepticism and the External Auditor,” “Skepticism and the Audit Committee,” “ Skepticism and the Financial Executive,” and “ Skepticism and the Internal Auditor.” The second webinar on the external auditor, scheduled for release in late October, will feature CAQ Executive Director Cindy Fornelli and Greg Weaver, Chairman and CEO of Deloitte & Touche LLP, as speakers.

The webinars are part of a set of collaborative projects developed by the CAQ, FEI, NACD and The IIA to advance the deterrence and detection of financial reporting fraud. The collaboration was formed in connection with the October 2010 release of the CAQ report Deterring and Detecting Financial Reporting Fraud – A platform for Action. The first of the partnership’s tools – FEI’s Fraud Literacy Quiz – was introduced in November 2011.

The next project, a fraud scenario developed by the CAQ, will be unveiled during FEI’s Current Financial Reporting Issues Conference in November. The fraud scenario is designed to prompt an interactive discussion around detecting and responding to an incident of fraud at a fictitious manufacturing firm.

Visit the CAQ's Anti-Fraud Initiative webpage to learn more about the initiative.

III. Audit Practice Meets Audit Research at CAQ’s 4th Annual Symposium

Approximately 100 attendees from the public company auditing profession, academia and the regulatory community gathered in Washington, D.C. on August 5 for the CAQ’s 4th Annual Auditing Research Symposium. Held immediately prior to the start of the American Accounting Association’s (AAA) Annual Meeting, the Symposium was hosted by KPMG LLP.

“The Symposium provides a unique opportunity for experts from the profession and academia to come together to delve into issues that are critical to the CAQ’s policy activities and to the future of the profession,” according to Cindy Fornelli.

John Veihmeyer, U.S. Chairman and CEO of KPMG LLP, and a member of the CAQ Governing Board, invited academic researchers to explore how their research might tie into, and build upon, current knowledge and practices.

“In the end,” said Veihmeyer, “the insights we glean from today’s discussions will be leveraged by the CAQ and other interested parties...to advance our collective understanding not only with thought leadership, but also actionable recommendations, so that we can achieve our ultimate goal: to enhance investor confidence and public trust in the global capital markets.”

John Veihmeyer, U.S. Chairman and CEO of KPMG LLP, welcomed Symposium attendees

Symposium discussion focused on two subjects: audit quality and financial reporting as it relates to going concern. Special guests included PCAOB Board Member Jeanette Franzel and SEC Deputy Chief Accountant Brian Croteau.

The following day, on August 6, the AAA Annual Conference included a panel discuss on “The Art of Professional Skepticism” that was moderated by Cindy Fornelli. Panelists included Craig Crawford, National Partner-in-Charge, Audit Quality and Process Monitoring for KPMG LLP, and Chair of the CAQ’s Research Advisory Board; Steven Glover, Mary & Ellis Professor and Director of the School of Accountancy at Brigham Young University; PCAOB Board Member Jay Hanson; and Greg Weaver, Chairman and CEO of Deloitte & Touche LLP.

“As we’ve seen in debates over auditor independence and mandatory rotation, the exercising of professional skepticism is a critical requirement to audit quality and auditor independence,” Fornelli explained. Panel participants shared their definitions of professional skepticism, discussed professional skepticism within a judgment framework, and identified judgment traps and shared tips on how auditors can avoid those traps.

Joining Cindy Fornelli for a conversation about the art of skepticism were (from left to right) Jay Hanson of the PCAOB, Greg Weaver of Deloitte & Touche LLP, KPMG's Craig Crawford, and Steve Glover of BYU.

IV. New Brochure Outlines CAQ Classroom Resources on Public Company Auditing Topics

The CAQ has developed a new guide for academics, “CAQ Classroom Resources on Public Company Auditing Topics.”

The brochure outlines the various resources and informative materials the CAQ produces that can supplement classroom material with a variety of resources – from publications and profession comment letters on public policy, to case studies on technical issues, to research surveys and educational videos on our system of investor protection.

The guide was distributed during both the CAQ’s Research Symposium and the AAA’s Annual Meeting.

All CAQ materials are free-of-charge to academics and the public at www.TheCAQ.org.