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The Center for Audit Quality

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Discover the latest insights, resources, and standards in auditing and accounting at the Center for Audit Quality (CAQ) website. Access valuable guidance, research, and tools to enhance your expertise and stay informed in the ever-evolving auditing landscape. 

Vanessa Teitelbaum, CPA, is Senior Director, Professional Practice at the Center for Audit Quality. She joined the CAQ in 2016 and advocates for stakeholders in the audits of public companies.

As an in-house expert and resource on auditing and accounting practice issues, Vanessa leads task forces comprised of audit partners and technical experts from the public company audit profession related to proposed standards and other current issues facing the profession. Projects have included development of the CAQ’s Audit Quality Disclosure Framework, Preparing for the New Credit Losses Standard: A Tool for Audit Committees, and the External Auditor Assessment Tool, among other publications. Vanessa has facilitated responses to proposed standards and regulations related to quality management, supervision of other auditors, quarterly reporting, the accelerated filer definition, and independence.

Before joining the CAQ, Vanessa served as an audit senior manager at PricewaterhouseCoopers and Dixon Hughes Goodman, leading audit teams of both large and midsize companies in a variety of industries, including technology, manufacturing, and financial services. Vanessa has over 15 years of audit experience, specialized in SEC financial reporting, technical accounting, and internal control matters.

Vanessa is a Certified Public Accountant in Maryland. She holds a bachelor of arts in Asian studies from Williams College and a master of business administration in accounting and finance from New York University Stern School of Business.

Vanessa Teitelbaum, CPA

A structured annual evaluation of the external auditor helps audit committees maintain audit quality, safeguard market confidence, and bolster communication between both parties.

By conducting a disciplined assessment of the external auditor’s independence, technical proficiency, and overall performance, audit committees reinforce...

A structured annual evaluation of the external auditor helps audit committees maintain audit quality, safeguard market confidence, and bolster communication between both parties.

By conducting a disciplined assessment of the external auditor’s independence, technical proficiency, and overall performance, audit committees reinforce a critical safeguard. A high-quality audit is a shared responsibility that depends on robust, constructive dialogue between the <a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/online-exclusives/2025/q3-2025/pcaob-inspection-audits/">external auditor</a> and the <a href="https://www.nacdonline.org/all-governance/governance-resources/committees-and-roles/audit-committee/">audit committee</a>.

“The evaluation and the appointment of the external auditor is one of the audit committee’s key responsibilities and it's important to follow a consistent process year over year,” said Sara Grootwassink Lewis, a board member at Weyerhaeuser Co., Freeport-McMoRan, PwC, and Healthpeak Properties, and a <a href="https://www.thecaq.org/audit-committee-council">Center for Audit Quality (CAQ) Audit Committee Council member</a>, at a November 2025 webinar on the topic. As such, implementing a formalized assessment is an effective way to facilitate essential conversations and an <a href="https://www.thecaq.org/wp-content/uploads/2025/10/caq_external-auditor-assessment-tool-for-audit-committees_2025-10.pdf">important tool</a> in establishing a consistent review process.
<h3>Having a Constructive Dialogue </h3>
The assessment is a powerful source of constructive feedback and should encompass the following four domains to ensure the evaluation is comprehensive and addresses the core drivers of audit quality:
<ul>
 	<li>The engagement team. Assess the expertise, depth, and efficiency of the specific audit team.</li>
 	<li>The audit firm. Evaluate the firm’s approach to promoting and monitoring overall audit quality.</li>
 	<li>Communication and interaction. Review the effectiveness, timeliness, and transparency of communications with the audit committee.</li>
 	<li>Independence and professional skepticism. Ensure that the external auditor maintains an unwavering <a href="https://prod.nacdonline.org/all-governance/governance-resources/governance-research/director-faqs-and-essentials/oversight-of-the-independent-auditor/?_gl=1*2u1tar*cleng_au*MTgyMTE4MjAwMS4xNzY0NTkyOTk1*_gcl_au*MTU0NTc0NTUxLjE3NTc5NTA2NzM.*_ga*NzY2Mjk0Nzc1LjE3NTYzMTc1MTU.*_ga_B0LJ5KFK1T*czE3NjUzNzIyODAkbzEwMCRnMSR0MTc2NTM3MjI5OCRqNDIkbDAkaDA.">position of independence</a>, which is vital for investor confidence.</li>
</ul>
<h3>The Keys to Partnership</h3>
The quality of the audit is directly tied to the strength of the relationship between the external auditor and the audit committee. While the annual assessment is important, effective auditor–audit committee relationships rely on communication that extends well beyond the annual cycle. One of the most critical elements is having a proactive audit partner, or someone who reaches out as an issue emerges rather than waiting for the next scheduled touchpoint.

“As long as it’s not in the rough, I can accept that. But the audit committee needs to know if it wasn’t right down the middle of the fairway. You need to talk about those things that might kick it over into the rough. We, as audit partners, need to have the courage to take a point of view. And we shouldn’t surprise management with that point of view,” said Stephen Parker an assurance partner in PwC’s Governance Insights Center, on the webinar.

It is also important to maintain connections with the firm’s broader leadership, not just the core audit team. This broader engagement brings visibility into emerging and evolving issues, supports stronger judgment, and reinforces a culture of openness. Ultimately, these relationships work best when built on a foundation of transparency and consistent, candid communication.

Key operational practices that can help strengthen this important partnership include:
<ul>
 	<li>Going beyond the meeting. Communication should extend beyond the quarterly meetings of the audit committee.</li>
 	<li>Starting engagement partner succession planning early. It is important to start the <a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/directorship-winter-2025-issue/is-it-time-for-a-new-audit-firm/">partner selection process</a> well before the required five-year rotation. As Karen Golz, audit committee chair at Analog Devices and iRobot Corp., noted in the CAQ webinar, this process should begin “approximately 18 to 20 months before the lead engagement partner is required to rotate off the engagement,” and the audit committee should ask for “a minimum of three qualified candidates.” It is also important that “the firm does not select the partner,” and that “the audit committee selects the partner,” she said.</li>
 	<li>Addressing sensitive topics. When facing complex or sensitive issues, the audit committee can expect the audit partner to be candid.</li>
</ul>
Ultimately, audit committees should view the external auditor as a strategic partner. The real value of the engagement comes from the quality of insights the auditor provides and the benefits of an independent perspective that helps the committee make more informed decisions and improve overall efficiency.

By fully embracing a structured, continuous, and constructive assessment process, audit committees can strengthen their governance role, fulfill their fiduciary duty, and ensure the highest levels of audit quality, thereby enhancing confidence in the capital markets. This work is more important than ever, especially as the <a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/online-exclusives/2024/q4-2024/how-audit-committees-can-get-involved-with-genai-adoption/">technological landscape</a> continues to change how organizations operate.

As Mike Seelig, a former director at the Federal National Mortgage Association, said on the CAQ webinar, “the annual evaluation of the external auditor is a cornerstone of good corporate governance.” It is a process that experienced audit committees take seriously, understanding that the auditor’s independence and performance are critical elements of investor confidence and capital market strength.

Watch the <a href="https://www.thecaq.org/event-external-auditor-assessment">full replay</a> of the webinar for more on how to effectively assess your external auditor. Access the CAQ's External Auditor Assessment Tool <a href="https://www.thecaq.org/external-auditor-assessment-tool-a-tool-for-audit-committees">here</a>.

<hr />

This article first appeared in <a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/online-exclusives/2025/q1-2025/the-evolving-role-of-audit-committees-in-2025-and-beyond/">NACD’s Directorship® </a>Online.

Fostering Constructive Dialogue with the External Auditor

Audit Committee

Audit Quality

Blog Post

CAQ Staff and Ideagen Audit Analytics Staff

Public companies have been operating in a state of transformation driven by the explosion of artificial intelligence, changing macroeconomic conditions, and evolving regulatory priorities. In response, oversight responsibilities of the audit committee are evolving to include emerging risk areas, in...

Public companies have been operating in a state of transformation driven by the explosion of artificial intelligence, changing macroeconomic conditions, and evolving regulatory priorities. In response, oversight responsibilities of the audit committee are evolving to include emerging risk areas, in addition to oversight of financial reporting and the external auditor.

Now in its 12th year, the <a href="https://www.thecaq.org/audit-committee-transparency-barometer">2025 Audit Committee Transparency Barometer</a>, produced in collaboration with Ideagen Audit Analytics, provides a comprehensive look at how audit committees of S&amp;P 1500 companies are communicating their oversight responsibilities to investors. By analyzing these disclosure trends and layering sentiments from audit committee members themselves captured in the <a href="https://www.thecaq.org/audit-committee-practices-report">Audit Committee Practices Report</a>, a distinct theme emerges: while audit committees play an essential role in overseeing key areas, their proxy disclosures are largely stagnating. This “transparency gap” presents an opportunity for audit committees to better tell their story.

[custom_quote text="Oversight responsibilities of the audit committee are evolving to include emerging risk areas, in addition to oversight of financial reporting and the external auditor."]
<h3>Oversight of the External Auditor: The Need for Tailored Disclosures</h3>
Investors want to understand how the audit committee oversees the external auditor including audit firm selection, compensation, evaluation and supervision, and engagement partner selection. However, tailored disclosures in this area have plateaued.

The following data from the Barometer highlights this stagnation in a few key areas:
<ul>
 	<li>50% of S&amp;P 500 companies discuss considerations for appointing the external auditor, a figure that remains unchanged from 2024.</li>
 	<li>Disclosure of audit committee involvement in selecting the external audit partner remained stagnant year-over-year at 53%.</li>
</ul>
Tailored disclosure is always important, but during disruption and rapid change, committees should be especially transparent.

“The persistence of standard language may stem from a combination of legal conservatism and resource constraints. However, by defaulting to standard language, audit committees miss the opportunity to highlight the robust, tailored evaluation processes that committees are conducting behind closed doors.”
<h6 style="text-align: right;">- Marie Pupecki, Ideagen Audit Analytics</h6>
[custom_quote text="Tailored disclosure is always important, but during disruption and rapid change, committees should be especially transparent."]
<h3>Where Disclosure Matches Audit Committee Priorities</h3>
While disclosures regarding core oversight areas have somewhat plateaued, disclosure rates related to audit committee oversight of emerging risk areas remain consistent with audit committee priorities. This is an example of one area where the “transparency gap” is closing.

The <a href="https://www.thecaq.org/audit-committee-practices-report">Audit Committee Practices Report</a> singles out cybersecurity as the number one priority for audit committees over the next 12 months. The report also noted that 62% of audit committees had primary oversight of cybersecurity risk.

This priority is reflected in disclosures. In the report, 64% of S&amp;P 500 companies explicitly state that the audit committee is responsible for cybersecurity oversight. Disclosing whether it is the audit committee’s responsibility to oversee cybersecurity provides investors with further transparency into how the company approaches governance of this risk area.

[custom_quote text="64% of S&amp;P 500 companies explicitly state that the audit committee is responsible for cybersecurity oversight."]
<h3>The “Skills Matrix” as a Standard</h3>
A positive trend in governance disclosure is the prevalence of the board skills matrix, which provides insights into both board composition and competency.

90% of S&amp;P 500 companies disclose a skills matrix, up from 85% in 2024 and is responsive to investors’ desire to understand the composition of the board and the expertise that each member brings.

“What makes the skills matrix particularly effective is that it transforms abstract claims about board expertise into concrete, comparable data points. The template is now established for future competency categories, and AI governance is the obvious next addition. As companies face increasing investor questions about AI strategy, risk management, and ethical deployment, boards will need to explicitly demonstrate who brings AI-relevant expertise to these critical oversight discussions.”
<h6 style="text-align: right;">- Marie Pupecki</h6>
[custom_quote text="90% of S&amp;P 500 companies disclose a skills matrix."]
<h3>Looking Ahead</h3>
Here at the CAQ, we know that transparency builds <a href="https://www.thecaq.org/AuditEffect">trust in capital markets</a>. As audit committees navigate 2026 and beyond, the proxy statement remains an excellent opportunity to tell their story.

“The most effective audit committees treat disclosure as a strategic communication opportunity, not a compliance burden. Data-driven benchmarking allows boards to move beyond guesswork and understand where they stand relative to peers on critical transparency measures. Whether it’s auditor oversight, risk management, or emerging issues like <a href="https://www.thecaq.org/rota-ai">AI governance</a>, committees that use benchmarking data can make informed decisions about where to enhance their disclosure and ensure they’re telling their governance story as effectively as they’re doing the work.”
<h6 style="text-align: right;">- Marie Pupecki</h6>
Explore more data from the <a href="https://www.thecaq.org/audit-committee-transparency-barometer">Audit Committee Transparency Barometer</a> and dive deeper into what the data reveals about today’s evolving governance landscape. For additional support for audit committee members, check out our <a href="https://www.thecaq.org/audit-committee-resource-center">Audit Committee Resource Center</a> for the latest updates.

Closing the Transparency Gap: Aligning Audit Committee Actions with Disclosures

Lucy Wang is Director, Anti-Fraud Initiatives at the Center for Audit Quality. In this role since 2019, Wang serves as a subject matter expert on issues related to fraud deterrence and detection. Wang is responsible for leading technical and policy-oriented projects while working closely with representatives from the Anti-Fraud Collaboration, task forces, and the broader profession. Wang manages the development of thought leadership, reports, and other resources that address current financial reporting fraud issues.

Before joining the CAQ, Wang served as Manager at PwC’s Forensic Services practice based in Washington, DC and Shanghai, China, where she assisted Fortune 500 companies with their global compliance programs, cross-border M&amp;A transactions, large scale risk assessments, regulatory investigations, and litigation support. Wang executed complex investigations involving cases such as financial statement fraud, misappropriation of assets, bribery, and corruption. Wang also led numerous anti-corruption and fraud risk assessments globally, including in Asia Pacific, Africa, and Europe.

Wang is a Certified Fraud Examiner, and she holds a BS in finance and accounting from New York University’s Leonard N. Stern School of Business.

Lucy Wang, CFE

The fraud risk landscape continues to evolve as external threats and new innovations impact businesses. All members of the financial reporting ecosystem play a critical role in deterring and detecting fraud, but what contributes to fraud risk and how can...

The fraud risk landscape continues to evolve as external threats and new innovations impact businesses. All members of the financial reporting ecosystem play a critical role in deterring and detecting fraud, but what contributes to fraud risk and how can companies stay vigilant in an ever-changing landscape?

This Fall, the <a href="http://www.antifraudcollaboration.org">Anti-Fraud Collaboration</a> (AFC) hosted a <a href="https://antifraudcollaboration.org/the-impact-of-fraud-on-u-s-public-companies-webcast/">webinar</a> to discuss the prevalence of fraud at U.S. public companies and how organizations can strengthen their anti-fraud efforts using key findings from the Association of Certified Fraud Examiners (ACFE) and AFC’s benchmarking survey on t<a href="https://antifraudcollaboration.org/the-impact-of-fraud-at-us-public-companies-2025-benchmarking-report/">he Impact of Fraud at U.S. Public Companies</a> and the <a href="https://www.thecaq.org/wp-content/uploads/2025/07/caq_institutional-investor-survey-fraud_2025-07.pdf">CAQ’s 2025 Institutional Investor Survey</a>.

I moderated a panel of diverse stakeholders including Andi McNeal, Chief Training Officer at the ACFE, Theodore (Theo) Bunting Jr., Independent Director, and Chris Ekimoff, Principal at  WithumSmith+Brown, PC, who each brought a unique perspective on leading efforts to deter and detect fraud as we discussed the survey results.

Read on for top insights from our discussion.

[custom_quote text="All members of the financial reporting ecosystem play a critical role in deterring and detecting fraud."]
<h3>The Reality of Fraud Losses: Perception vs. Data</h3>
The ACFE and AFC benchmarking report compiled findings from a survey of financial reporting stakeholders who work for or do substantial work with U.S. public companies, asking about their companies’ fraud losses in recent years, factors that contribute to fraud, and how their companies are managing various types of fraud risks. The respondents had direct visibility into the total revenue and the actual amount of known losses from all forms of fraud for 2023 and 2024.

The <a href="https://legacy.acfe.com/report-to-the-nations/2024/">ACFE’s 2024 Report to the Nations</a> estimated that organizations lose an average of 5% of their annual revenue to fraud. However, data from our latest benchmarking report specific to U.S. public companies paints a more nuanced picture of the issue.

<img class="alignnone wp-image-17089 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AiA_AFC-Webinar_Image-1.png" alt="" width="352" height="295" />
<h6>Fig. 1, <a href="https://www.acfe.com/fraud-resources/the-impact-of-fraud-at-us-public-companies">The Impact of Fraud at U.S. Public Companies Benchmarking Report</a></h6>
<ul>
 	<li>Known Losses: Survey respondents reported that the median percentage of annual revenue lost due to all forms of known fraud at U.S. public companies was 1.07% and 1.06% for 2023 and 2024, respectively.</li>
 	<li>Estimated Losses: When asked to estimate the loss due to fraud at a typicalS. public company (accounting for undetected fraud), estimates rose to a median estimate of 2.5%, of which employees and investors estimated fraud losses of 3% of annual revenue, and external roles estimated 4%.</li>
</ul>
While 1% may sound minimal, 1% of the Fortune 500’s revenue translates to roughly $200 billion annually. However, it is important to contextualize the amount on a micro-level that is unique to organizations and their specific types of fraud risks and risk profile. Therefore, it is important to reframe the 1% statistic by considering what is an appropriate margin for error for large multinational companies that operate in multiple jurisdictions.

The speakers also described a "NIMO" (Not In My Organization) phenomenon. While many financial reporting stakeholders recognize that fraud is a persistent problem, few choose to believe that fraud is occurring within their own organizations. This mindset can be dangerous for companies. It is important for organizations and stakeholders to stay vigilant so they can assess and respond to fraud risks appropriately.

[custom_quote text="While many financial reporting stakeholders recognize that fraud is a persistent problem, few choose to believe that fraud is occurring within their own organizations."]
<h3>The Shifting Fraud Risk Landscape: External Threats Take Center Stage</h3>
The ACFE and AFC survey results highlighted a distinct shift in how organizations determine their greatest fraud risks. While internal control over financial reporting remains vital, the most probable and significant fraud risks identified were largely external.

<img class="alignnone wp-image-17087 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AiA_AFC-Webinar_Image-2.png" alt="" width="519" height="461" />
<h6>Fig. 3, <a href="https://www.acfe.com/fraud-resources/the-impact-of-fraud-at-us-public-companies">The Impact of Fraud at U.S. Public Companies Benchmarking Report</a></h6>
As illustrated in the heat map, the risks that have the highest likelihood of occurring, according to survey respondents, include:
<ol>
 	<li>Cyberfraud (rated as the highest likelihood and highest significance)</li>
 	<li>Fraud by vendors and sellers</li>
 	<li>Customer payment fraud</li>
</ol>
Interestingly, traditional “internal” threats, such as financial statement fraud and asset misappropriation, were viewed as less likely to occur, though its impact is still viewed as significant. This suggests that while companies’ internal controls are improving, their defenses are continuously being threatened by external risks.

[custom_quote text="While internal control over financial reporting remains vital, the most probable and significant fraud risks identified were largely external."]
<h3>The “Why”: Contributing Factors and The Culture Gap</h3>
Each role within an organization views fraud differently depending on their unique perspective. This divergence was clear in the AFC’s benchmarking report when respondents were asked to rank the significance of ten factors in contributing to the current level of fraud.

Employees and external respondents (consultants, advisors, external auditors, and government agencies) cited the regulatory environment, external pressures, and organizational culture as top contributing factors. Governance responses highlighted the quality of external audits, technological advancements, and maturity of anti-fraud programs as most significant. The only factor in all groups' top five ranking was economic conditions, highlighting that all stakeholders are impacted by economic uncertainty and believe it could contribute to a heightened fraud risk environment.

This data emphasizes the need for stronger internal communication. As noted during the panel, employees on the front lines feel the pressure of compliance and the economy, while boards rely heavily on assurance providers. To bridge this gap, organizations must prioritize culture.

Panelists highlighted that while technology, including artificial intelligence (AI), is a valuable tool, it is ultimately "human behaviors and communications" that drive outcomes. A strong tone at the top, flowing from management to the board of directors, is critical for fostering trust. Without that culture of trust, essential detection mechanisms such as whistleblower programs cannot function effectively.

[custom_quote text="Employees on the front lines feel the pressure of compliance and the economy, while boards rely heavily on assurance providers."]
<h3>Looking Ahead: Vigilance is Key</h3>
As we look forward, the majority of survey respondents anticipate that the fraud risk environment will become even more challenging, likely due to emerging technologies such as AI and a shifting regulatory landscape.

<img class="alignnone wp-image-17088 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AiA_AFC-Webinar_Image-3.png" alt="" width="642" height="220" />
<h6>Fig. 6, <a href="https://www.acfe.com/fraud-resources/the-impact-of-fraud-at-us-public-companies">The Impact of Fraud at U.S. Public Companies Benchmarking Report</a></h6>
As seen in the graph and discussed during our webinar, 66% of survey respondents expect the level of fraud to increase (either slightly or significantly) over the next two years. Investors share this concern, with 65% expecting fraud levels to increase.

How can financial reporting stakeholders strengthen our defenses against fraud? Survey respondents in governance roles suggested three areas for improvement:
<ol>
 	<li>Proactive and Continuous Monitoring: Moving from reactive investigation to real-time detection.</li>
 	<li>Technology and AI: Leveraging tools to proactively identify anomalies in large datasets.</li>
 	<li>Fraud Awareness and Culture: Training employees to maintain a "fraud lens" and exercise professional skepticism.</li>
</ol>
Whether you are an external auditor, an internal auditor, management, or a board member, you have a role to play in the fight against fraud. The fraud risk landscape is dynamic, but by leveraging technology, fostering a culture of skepticism, and breaking down silos within your organization, all members of the ecosystem can better protect the integrity of financial reporting and the U.S. capital markets.

I encourage you to watch the <a href="https://antifraudcollaboration.org/the-impact-of-fraud-on-u-s-public-companies-webcast/">replay of the AFC webinar</a> and download the full<a href="https://antifraudcollaboration.org/the-impact-of-fraud-at-us-public-companies-2025-benchmarking-report/"> AFC Benchmarking Report</a> and<a href="https://www.thecaq.org/institutional-investor-survey-fraud-2025"> CAQ Investor Survey</a>. Follow the AFC on <a href="https://www.linkedin.com/company/antifraudcollaboration/">LinkedIn</a> for the latest insights on fraud deterrence and detection.

[custom_quote text="Whether you are an external auditor, an internal auditor, management, or a board member, you have a role to play in the fight against fraud."]

Culture Technology, and Vigilance: How the Fraud Risk Landscape is Evolving

Anti-Fraud

Desiré Carroll, CPA, CA(SA) is a Senior Director, Professional Practice at the Center for Audit Quality. Her role involves advancing technical and policy-oriented projects to identify, develop, and seek consensus on issues affecting the public company auditing profession. This includes engaging with senior leaders across the financial reporting ecosystem, drafting comment letter responses to regulators, and developing thought leadership publications.

Before joining the CAQ, Desiré served as Associate Director – Sustainability Assurance at the American Institute of Certified Public Accountants (AICPA). Prior to that, she spent over 11 years at Deloitte primarily in their New York M&amp;A Transaction Services group and initially in their Audit practice. Desiré is a CPA and a South African Chartered Accountant.

Desiré Carroll, CPA, CA(SA)

We analyzed S&amp;P 500 companies’ SEC Form 10-Ks to understand what leading companies are disclosing about these fast-moving topics and where in the 10-K companies are relaying this information to investors. Our findings show that AI, digital assets, and sustainability-related...

We analyzed <a href="https://www.thecaq.org/sp500-companies-10K-analysis">S&amp;P 500 companies’ SEC Form 10-Ks</a> to understand what leading companies are disclosing about these fast-moving topics and where in the 10-K companies are relaying this information to investors. Our findings show that AI, digital assets, and sustainability-related disclosures have grown or remained strong compared to previous years’ 10-K filings.

It’s critical that companies clearly communicate how these topics are impacting operations, from potential risks to possible financial statements impacts, to foster investor and public trust in their disclosures.

Keep reading for my top takeaways from our 10-K analysis and how auditors can support these evolving disclosures.

[custom_quote text="Our findings show that AI, digital assets, and sustainability-related disclosures have grown or remained strong compared to previous years’ 10-K filings."]
<h3>The Rapid Rise of AI Disclosures</h3>
AI is rapidly being integrated into business operations, accelerating the need for companies to disclose how they are using the technology. <a href="https://www.thecaq.org/sp-500-and-ai-reporting">Our analysis</a> found that 90% of S&amp;P 500 companies (448 companies) mentioned AI-related information in their 2024 10-K – marking a nearly 25% increase from 359 companies in 2023. This growth confirms that transparency in AI is a key focus for management and investors.

<img class="alignnone wp-image-17039 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AI-Related-Information-Mentioned-in-10-K.png" alt="" width="2400" height="1254" />

In our analysis, the implications of AI are most frequently cited by companies as part of introducing risks (Item 1A. Risk Factors) of which investors should be aware and business operations and strategy (Item 1. Business) in the 10-K.

Public company auditors can <a href="https://www.thecaq.org/rota-ai">play a key role</a> in enhancing confidence in a company’s governance and controls over AI. There is a clear need for trust in AI, and auditors can help bridge this gap.

<img class="alignnone wp-image-17044 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_Section-of-10-K-AI-is-Mentioned-1.png" alt="" width="2400" height="1254" />

We also observed an over 50% increase in AI-related mentions related to the financial statements (Item 8 in the 10-K). Our <a href="https://www.thecaq.org/institutional-investor-survey-artificial-intelligence">Institutional Investor Survey</a> found that most investors support the use of AI in the audit process, with 90% saying the technology would increase their trust in the results by improving accuracy and reducing errors. Auditors are utilizing AI to improve the efficiency of audits in an ever-changing economy and will continue upskilling to leverage the technology to its full potential.

[custom_quote text="We also observed an over 50% increase in AI-related mentions related to the financial statements (Item 8 in the 10-K)."]
<h3>Digital Assets Introduce New Blind Spots</h3>
This year, we performed our first-ever analysis of <a href="https://www.thecaq.org/sp-500-and-digital-asset-reporting">digital asset-related disclosures</a> in S&amp;P 500 companies’ 10-Ks. We observed that only 47 S&amp;P 500 companies, or approximately 9%, mentioned digital asset-related information in their latest 10-K, with most mentions tied to potential areas of risk (Item 1A. Risk Factors).

This aligns with our Fall 2025 <a href="https://www.thecaq.org/audit-partner-pulse-survey">Audit Partner Pulse Survey</a>, where 78% of respondents indicated that companies in their primary industry have no exposure to cryptocurrency, and only 6% indicate they’re having conversations with their clients about the potential accounting and reporting implications of the use of cryptocurrency.

<img class="alignnone wp-image-17045 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_Section-of-10-K-Digital-Assets-are-Mentioned.png" alt="" width="2400" height="1254" />

The primary risks described in digital assets related disclosures were regulatory uncertainty, market volatility, and technological adaptation costs. Companies specifically noted that the uncertain and evolving nature of the regulatory landscape could lead to costly future compliance. Additionally, the volatility of the digital asset market was highlighted as a risk that could impact companies, whether they are directly or indirectly invested.

While this new technology often promises transparency, as shown in our latest <a href="https://partnerswsj.com/caq-auditing-cryptos-blind-spots/p/1">Wall Street Journal article</a>, it does not eliminate risks that lurk in off-chain information and private key management. Auditors can help identify and address these risks and ensure that even in decentralized environments, companies maintain accountability and financial integrity.

[custom_quote text="The volatility of the digital asset market was highlighted as a risk that could impact companies, whether they are directly or indirectly invested."]
<h3>Sustainability-Related Disclosures Remain Largely Consistent</h3>
The latest S&amp;P 500 companies’ 10-Ks reflect ongoing investor demand for <a href="https://www.thecaq.org/sp-500-10k-climate">sustainability-related information</a>, with a consistent number of 494 companies disclosing sustainability related information in 2023 and 2024 filings.

Most disclosures continued to relate to potential risks and business operations (Items 1A and 1). Climate-related mentions in financial statements increased by 18% with most mentions continuing to fall within significant accounting policies, commitments and contingencies or litigation, debt or borrowing arrangements, and income taxes.

<img class="alignnone wp-image-17046 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_Climate-Related-Information-Mentioned-in-10-K.png" alt="" width="2400" height="1254" />

From 2023 to 2024, there was a roughly 16% decrease in companies that disclosed net zero or carbon neutral commitments and a 5% decrease in companies that mentioned scope 1, 2, or 3, greenhouse gas emissions information in their Form 10-K’s.

We observed that roughly 21% of S&amp;P 500 companies mentioned the European Union Corporate Sustainability Reporting Directive in some way (a 9% increase from the prior year), and 18% mentioned the California Climate Laws (a 3% increase from the prior year), demonstrating that despite the maturity of sustainability-related disclosures, the regulatory landscape demands that leading companies continuously evaluate how evolving disclosure requirements may impact business risks or operations.

[custom_quote text="From 2023 to 2024, there was a roughly 16% decrease in companies that disclosed net zero or carbon neutral commitments."]
<h3>The Future of the Profession</h3>
A key takeaway from our analysis of 10-Ks is that much of what companies are disclosing about AI, digital assets, and sustainability is largely being disclosed in sections of the 10-K that are not the financial statements. This means that the information is not being audited as part of the financial statement audit. That is because in an audit of the financial statements, the auditor has a limited responsibility for information disclosed in sections of the 10-K that are not the financial statements. Professional standards require the auditors to “read and consider” that information. However, “reading and considering” information involves substantially less work than an audit.

The good news, as CAQ CEO Julie Bell Lindsay recently said at an Axios event, “auditors are not one trick ponies.” As the reliability of information presented outside of the financial statements continues to become more critical to investors, the audit profession stands ready to bring the same trust to this information as they have brought to financial statements for many years. In fact, we see this happening: <a href="https://www.thecaq.org/sp-500-and-esg-reporting">73% of S&amp;P 500 companies</a> that report standalone sustainability information already obtain assurance over certain of that information in an assurance engagement that is separate and apart from the audit of the financial statements.

The CAQ will continue to monitor how leading companies are disclosing key information and how auditors can play a role in building trust in this data, and we encourage <a href="https://www.thecaq.org/audit-committee-resource-center">audit committees</a> and <a href="https://www.thecaq.org/stakeholders-investors">investors</a> to understand how these disclosure trends can support well-informed decisions that shape our economy.

For the latest insights on corporate reporting trends, explore more <a href="https://www.thecaq.org/resource-hub">resources</a> and follow the CAQ on <a href="https://www.linkedin.com/company/center-for-audit-quality">LinkedIn</a>.

AI, Digital Assets, and Sustainability: What Form 10-Ks Tell Us About Reporting Trends

Emerging Reporting Areas

hs_trevor-barton

HS_Trevor Barton

Trevor Barton 

Managing Partner – Quality, Risk & Regulatory, Deloitte & Touche LLP

As we mark Fraud Awareness Week, it’s an opportunity to reflect on the important role auditors play in safeguarding the integrity of our capital markets. At Deloitte, we recognize that the assurance provided by our audit professionals is not just...

As we mark Fraud Awareness Week, it’s an opportunity to reflect on the important role auditors play in safeguarding the integrity of our capital markets. At Deloitte, we recognize that the assurance provided by our audit professionals is not just a regulatory requirement—it’s a cornerstone of trust for investors, boards, and the broader financial ecosystem.
<h3>Integrity, Ethics, and Experience: The Foundation of Audit Quality</h3>
Our audit teams are guided by unwavering ethics, integrity, and a wealth of experience—attributes that are fundamental to delivering quality, value, and trust through our work. This isn’t just about checking boxes—it’s about understanding the complex economic environment and business processes, identifying risk factors, and applying decades of industry knowledge to every engagement.

Schemes to perpetrate fraud continuously evolve—exploiting new technologies and vulnerabilities as they emerge. Our auditors undergo continuous training to stay ahead of emerging threats, including those posed by evolving technologies. By applying advanced analytics and professional skepticism as well as the support of dedicated forensic specialists and other experienced resources, coupled with our deep industry experience and independent mindset, we are better equipped to detect anomalies and patterns that may signal fraudulent activity. This rigor is what drives audit quality and enables us to provide assurance that financial information is materially accurate and complete.

[custom_quote text="Schemes to perpetrate fraud continuously evolve—exploiting new technologies and vulnerabilities as they emerge."]
<h3>The Value of Assurance: Confidence for the Capital Markets</h3>
Ultimately, the work of public company auditors is about instilling confidence. When investors, policymakers, and boards see that financial statements have been audited by independent, credentialed professionals, they can place greater trust and reliance on the financial information shared. This trust is vital to the functioning of our capital markets and the broader economy.

As we observe Fraud Awareness Week, I am proud of the role Deloitte’s auditors play in safeguarding the integrity of our capital markets from fraud and that we remain a leader in the pursuit of quality, transparency, and integrity.

[custom_quote text="Ultimately, the work of public company auditors is about instilling confidence."]

The Power of Assurance in Promoting Integrity and Resilience Against Fraud

Audit Committee Effectiveness: A Webinar Series
Audit committees should regularly (at least annually) evaluate the external auditor in fulfilling their duty in order to make an informed recommendation to the board whether to retain the external auditor. Robust, two-way dialogue that...

<h4>Audit Committee Effectiveness: A Webinar Series</h4>
Audit committees should regularly (at least annually) evaluate the external auditor in fulfilling their duty in order to make an informed recommendation to the board whether to retain the external auditor. Robust, two-way dialogue that includes constructive feedback to the external auditor may improve audit quality and enhance the relationship between the audit committee and the external auditor.

Join us for a discussion from both sides of the aisle – audit committee members and the auditor – about how to effectively perform this assessment. We’ll discuss the just released 2025 update of the CAQ’s External Auditor Assessment Tool for Audit Committees.

Note: This webcast is eligible for 1 CPE credit to those who attend the webcast live.

<img class=" wp-image-12997 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2022/11/CAQ_NACD_400x150.png" alt="CAQ NACD" width="200" height="75" />

Audit Committee Effectiveness: A Webinar Series is brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the financial reporting ecosystem alongside resources developed to aid audit committees and public company board members.

External Auditor Assessment Webinar: Who, Why, What, When and How

Webinar

Event

Join the Anti-Fraud Collaboration (AFC) in our webcast to explore the pervasiveness and impact of fraud at U.S. public companies and gain insights into recent survey findings that shed light into the current fraud risk environment and leading practices for...

Join the Anti-Fraud Collaboration (AFC) in our webcast to explore the pervasiveness and impact of fraud at U.S. public companies and gain insights into recent survey findings that shed light into the current fraud risk environment and leading practices for fraud deterrence and detection. A panel of multi-stakeholder experts will discuss findings from a joint survey from ACFE-AFC on The Impact of Fraud at U.S. Public Companies and CAQ’s 2025 Institutional Investor Survey, and provide insights into the current level of fraud and fraud losses experienced by U.S. public companies, factors that contribute to and can mitigate the most prevalent fraud risks faced by companies in the current environment, identifying and assessing the likelihood and significance/magnitude of those factors, and areas of focus for enhancing the effectiveness of fraud deterrence and detection.

<a href="http://www.antifraudcollaboration.org"><img class="alignnone size-full wp-image-9863" src="https://www.thecaq.org/wp-content/uploads/2020/05/AFC-Logo_35px.png" alt="Anti-Fraud Collaboration Logo" width="265" height="35" /></a>

Note: The virtual event was eligible for 1 CPE credit.

The Impact of Fraud on U.S. Public Companies

Audit Committee Effectiveness: A Webinar Series
Welcome to Audit Committee Effectiveness: a webinar series brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the...

<h4>Audit Committee Effectiveness: A Webinar Series</h4>
Welcome to Audit Committee Effectiveness: a webinar series brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the financial reporting ecosystem alongside resources developed to aid audit committees and public company board members. Stay tuned to this page for information about topics, participants, and how to register for upcoming webinars.

<img class=" wp-image-12997 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2022/11/CAQ_NACD_400x150.png" alt="CAQ NACD" width="200" height="75" />

Join us for a discussion about the fourth edition of the Audit Committee Practices Report, a collaboration between Deloitte’s Center for Board Effectiveness and the Center for Audit Quality. Based on survey findings, this webinar offers audit committee members and those who work with them an opportunity to hear about committee priorities, challenges, and opportunities, as well as leading practices around audit committee effectiveness.

Note: This webcast was eligible for 1 CPE credit to those who attended the webcast live.

2025 Audit Committee Practices Report

<h4>Audit Committee Effectiveness: A Webinar Series</h4>
Welcome to Audit Committee Effectiveness: a webinar series brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the financial reporting ecosystem alongside resources developed to aid audit committees and public company board members. Stay tuned to this page for information about topics, participants, and how to register for upcoming webinars.

<img class=" wp-image-12997 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2022/11/CAQ_NACD_400x150.png" alt="CAQ NACD" width="200" height="75" />

In our initial AI 101 for Audit Committees <a href="https://www.thecaq.org/artificial-intelligence-ai-101-for-audit-committees">webinar</a>, we tackled how recent advancements, powered by the likes of OpenAI’s ChatGPT and Google’s Gemini, has captured the attention of corporate leaders around the world.  Corporate boards are focusing on better understanding the technology and establishing guardrails to ensure risks of information security, data quality, hallucinations, and other areas are appropriately managed.

Now, in the second of a 2-part series, speakers <a href="https://www.ey.com/en_us/people/richard-jackson">Richard Jackson</a> (Global Artificial Intelligence Assurance Leader, EY) and <a href="https://www.linkedin.com/in/hrncirik/">Cory Hrncirik</a> (Modern Finance Lead, Microsoft) join us again with <a href="https://www.nacdonline.org/philadelphia/philadelphia-leadership/tom-petro/">Tom Petro</a> (Managing Partner, Capital Partners &amp; Audit Committee Member) to discuss how things have evolved in just the past 8 months.

We’ll discuss the evolving role of the audit committee, including oversight of both management and the external auditor. We’ll dive into such questions as:
<ul>
 	<li>Does the company have the requisite expertise to select, develop, deploy, and monitor genAI technologies?</li>
 	<li>Who (individual or group) in the company is responsible for oversight of the use of genAI?</li>
 	<li>Does the company have a process to track and monitor the use of genAI throughout the company, including use by third-party service providers?</li>
 	<li>What is the auditor’s understanding of the financial reporting implications of the company’s use of genAI technologies?</li>
 	<li>Does the company’s use of genAI technologies have a significant impact on the planned audit scope?</li>
 	<li>Has the auditor identified any fraud risks related to the company’s use of genAI technologies? How has the auditor addressed such risks in the audit?</li>
</ul>
Note: CPE available only to participants who joined the live webcast. 

See the CAQ’s resources for more information: <a href="https://www.thecaq.org/wp-content/uploads/2024/04/caq_auditing-in-the-age-of-generative-ai__2024-04.pdf">Auditing in the Age of Generative AI</a> and  <a href="https://www.thecaq.org/ac-oversight-in-the-age-of-genai">Audit Committee Oversight in the Age of Generative AI</a>.

Artificial Intelligence (AI) 101 For Audit Committees - Part II

Artificial Intelligence

This hour-long webcast will showcase emerging issues facing public companies and their auditors. It will feature Christine Gunia, Director of the PCAOB’s Division of Registration and Inspections, and representatives from the public company auditing profession. Panelists will discuss PCAOB inspection...

This hour-long webcast will showcase emerging issues facing public companies and their auditors. It will feature Christine Gunia, Director of the PCAOB’s Division of Registration and Inspections, and representatives from the public company auditing profession. Panelists will discuss PCAOB inspection findings and areas of focus as well as audit firm best practices.

Note: CPE available only to participants who joined the live webcast.

Audit Insider Webinar | October 2024

Auditors

Policymakers

Washington DC (December 4, 2025) – Today, the Center for Audit Quality (CAQ) and Ideagen Audit Analytics released the 12th annual Audit Committee Transparency Barometer Report. The report, which has been conducted since 2014, analyzes audit committee disclosures of companies...

Washington DC (December 4, 2025) – Today, the Center for Audit Quality (CAQ) and Ideagen Audit Analytics released the 12th annual Audit Committee Transparency Barometer Report. The report, which has been conducted since 2014, analyzes audit committee disclosures of companies in the S&amp;P 1500. 

As audit committees navigate emerging risks including economic disruption and the rapid integration of artificial intelligence, investors need insights into board composition, expertise, and oversight processes. This year’s Barometer shows that while skills matrix disclosure continues at high rates and disclosure of cybersecurity expertise on boards has grown, most disclosure areas have stagnated or declined, providing audit committees with an opportunity to enhance transparency about their evolving oversight responsibilities. 

Key findings of the report include:  
<ul>
 	<li aria-setsize="-1" data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" data-aria-posinset="1" data-aria-level="1">90% of S&amp;P 500 companies disclosed the board of directors' skills matrix, an increase from 85% in 2024. S&amp;P MidCap companies (80%) and S&amp;P SmallCap companies (70%) also showed slight increases. </li>
</ul>
<ul>
 	<li aria-setsize="-1" data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" data-aria-posinset="2" data-aria-level="1">65% of S&amp;P 500 boards disclosed they have a cybersecurity expert—representing a 5-percentage point increase from 2024. </li>
</ul>
<ul>
 	<li aria-setsize="-1" data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" data-aria-posinset="3" data-aria-level="1">Stagnation and decline of audit committee disclosures were observed across several measures, including (for S&amp;P 500 companies): disclosure of the annual evaluation of the external auditor (decreased from 39% to 38%); considerations in appointing or (re)appointing the external auditor (remained flat at 50%); and factors contributing to the selection of the audit partner (decreased from 17% to 16%). </li>
</ul>
"When disruption accelerates, disclosures cannot stand still," said Julie Bell Lindsay, CEO of the Center for Audit Quality. "Audit committees perform a key role in our capital markets, from overseeing the external auditor to monitoring company financial reporting and internal controls and serving as an effective check on management.  Meaningful, investor-focused disclosure is one of the most powerful tools audit committees have to tell their story and demonstrate this important role. Each proxy season presents an important opportunity for audit committees to more clearly communicate how they oversee risk and uphold audit quality, strengthening investor confidence in a rapidly changing environment." 

"As audit committee responsibilities continue to expand, the Audit Committee Transparency Barometer provides critical insights into how committees are adapting their disclosures and where there is room for improvement," said Michael Nohrden, VP Strategy Audit and Risk for Ideagen. "Our ongoing collaboration with the CAQ ensures audit committees have access to robust data and peer comparisons across the S&amp;P 1500, empowering them to strengthen their communications with stakeholders. With emerging risks like AI adoption and cybersecurity threats reshaping oversight responsibilities, transparent disclosure has never been more important." 

The full report is available to read <a href="https://www.thecaq.org/audit-committee-transparency-barometer">here</a>.  

+++

About the Center for Audit Quality

The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility, and transparency of public company audits;</li>
 	<li>Advancing critical issues affecting public company audits;</li>
 	<li>Driving innovation in assurance; and</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

About Ideagen Audit Analytics  

Ideagen Audit Analytics is an independent research provider that enables the accounting, legal, and investment communities to analyze auditor market intelligence, public company disclosure trends, and risk indicators. For more information, email info@auditanalytics.com or call 508-476-7007.

Annual Audit Committee Disclosure Barometer Reveals Stagnation in Key Disclosure Areas Despite Period of Disruption

Washington D.C., June 5, 2025 – The Center for Audit Quality (CAQ) has released its Spring 2025 Audit Partner Pulse Survey, providing insights from audit partners at the nation’s leading public company audit firms. Now in its fourth year, the...

Washington D.C., June 5, 2025 – The Center for Audit Quality (CAQ) has released its Spring 2025 Audit Partner Pulse Survey, providing insights from audit partners at the nation’s leading public company audit firms. Now in its fourth year, the survey captures audit partners’ views on the future of the U.S. economy, evolving business risks, and workforce trends. As trusted experts with a front-row seat to corporate strategy and performance, audit partners provide a unique lens into how U.S. companies are navigating a period marked by economic uncertainty, geopolitical tension, and rapid technological change.

Key findings from the report include:

Increasing Economic Pessimism
<ul>
 	<li>The percentage of audit partners expressing pessimism about the U.S. economy surged from 10% in Fall 2024 to 44% today, while optimism dropped by more than half, from 38% to 15%.</li>
 	<li>Fear of a potential recession, ongoing geopolitical instability and trade uncertainties have prompted companies to double down on financial performance, cost management, and risk mitigation strategies.</li>
</ul>
Shifting Workforce Strategies
<ul>
 	<li>While many companies are reducing headcount, they are simultaneously investing in upskilling existing employees.</li>
 	<li>Respondents also underscored the growing importance of strong anti-fraud cultures, especially as economic stressors heighten risk across industries.</li>
</ul>
Integration of New Technologies
<ul>
 	<li>AI adoption continues to grow across industries, primarily to improve customer service and streamline internal operations.</li>
 	<li>Despite increasing regulatory attention and high-profile initiatives like the SEC’s new Crypto Task Force, audit partners report limited cryptocurrency-related investments among public companies.</li>
</ul>
“Audit partners offer a valuable window into today’s complex business environment, helping us better understand the challenges companies face and the strategies they’re using to move forward,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “Despite economic uncertainty, it’s encouraging to see companies investing in innovation, upskilling their workforce, and strengthening cultures of integrity as they build a foundation for long-term resilience and growth.”

Download the <a href="https://www.thecaq.org/audit-partner-pulse-survey">Spring 2025 Audit Partner Pulse Survey</a> to see the full results.

+++

About the Center for Audit Quality

The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility, and transparency of public company audits;</li>
 	<li>Advancing critical issues affecting public company audits;</li>
 	<li>Driving innovation in assurance; and</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

Audit partners say economic uncertainty and geopolitical risks rise, while companies continue integrating AI to improve customer experience, according to latest survey.

In collaboration with Edge Research, the Center for Audit Quality released a new report exploring shifts in student perceptions of accounting and identifying messaging strategies to broaden the talent pool. The findings build on research conducted from 2021 to 2023...

In collaboration with Edge Research, the Center for Audit Quality released a new report exploring shifts in student perceptions of accounting and identifying messaging strategies to broaden the talent pool. The findings build on research conducted from 2021 to 2023 and offer key insights into today’s educational landscape.

Washington D.C., April 28, 2025 – In recent years, the accounting profession has undertaken a rebranding initiative aimed at dispelling common misperceptions among students and highlighting the breadth, impact, and relevance of careers in accounting. Several years after the Center for Audit Quality (CAQ) launched its Accounting+ campaign to fight this bias and inform students of the myriad opportunities an accounting career can offer, new research assesses the campaign’s progress and the new challenges it has uncovered.

The CAQ partnered with Edge Research on the report, <a href="https://www.thecaq.org/expanding-the-accounting-profession-pipeline">Expanding the Accounting Profession Pipeline: 2024 Update</a>, to better understand high school and early college students’ academic and professional motivations and to identify the most successful strategies to attract the next generation of accountants.

“This research is an important step toward understanding both the persistent challenges and the emerging opportunities in building a strong accounting talent pipeline. It’s encouraging to see growing interest among students. This is proof that when we listen, learn, and adapt, we can positively impact the talent pipeline.” - Julie Bell Lindsay, CEO, the Center for Audit Quality.

Some key findings from the report include:
<ul>
 	<li>Significant improvements have been made in how students view accounting careers with notable increases in seeing accounting as a career that is meaningful and provides value, has strong long-term earning potential, and a good work-life balance. These positive shifts indicate the professions’ collective efforts to transform accounting’s image are gaining traction.</li>
 	<li>Practical, benefit focused messaging drives interest with students, especially messages that highlights accounting’s strong salary potential, career flexibility, and job security, and emphasizing these points as strengths within the accounting profession resonated strongly amongst all demographics in the study.</li>
 	<li>Direct exposure to accounting strongly correlates with interest in accounting. With many students lacking personal connections to accountants, the profession must continue meeting students where they are – both in classrooms and on social media. Accounting professionals can maximize their impact by using Accounting+ evidence-based messaging on salary potential, career flexibility and job security- approaches shown to significantly increase student interest.</li>
</ul>
“In a time of economic uncertainty, young people are making deliberate choices to prioritize stability and flexibility in their careers like never before. This presents a challenge, but also a tremendous opportunity for the accounting profession. For students, especially those from underserved communities, this isn’t just about employment. It’s about building a future and creating generational wealth." - Liz Barentzen, Vice President, Talent, the Center for Audit Quality.

According to the <a href="https://www.thecaq.org/accounting-annual-report">Accounting+ 2024 annual report</a>, many of these key messaging and outreach strategies deeply resonated with student populations. Accounting+ reached students more than 2 billion times via paid advertising, social media, and other digital platforms, leading to 26 million website visits in 2024 (an 86% increase from 2023) and 8 million new users (a 100% increase from 2023). The updated research shows encouraging progress in shifting the perception of accounting careers among students; however, significant roadblocks remain in translating this perception into increased enrollment numbers. A continued profession-wide, comprehensive approach is crucial to engage new students and provide educators with the resources they need to build a stronger, more competitive talent pool.

Download the full report <a href="https://www.thecaq.org/expanding-the-accounting-profession-pipeline">here</a> to learn more about the results.

About the Research

The CAQ commissioned Edge Research to perform a comprehensive follow-up on their <a href="https://thecaqprod.wpenginepowered.com/wp-content/uploads/2023/07/caq_increasing-diversity-in-the-accounting-profession-pipeline_2023-07.pdf">2023 report</a> to assess the progress of initiatives like Accounting+, identify new engagement opportunities, and understand the evolving student mindset in “Expanding the Accounting Profession Pipeline.”

Edge Research employed a mixed-methods approach combining quantitative and qualitative methodologies to gain comprehensive insights into students’ perceptions of accounting careers. The quantitative component consisted of an online survey with 3,487 high school and college students across the United States, including substantial samples of Black/African American, Hispanic, AAPI, and White students. This survey tracked key metrics against baseline data from 2021 to 2022 and examined college and career decision journeys, accounting perceptions, barriers to entry, and messaging effectiveness across various educational levels. After this broad data collection, Edge Research conducted four virtual focus groups in January 2025 with high school students (divided between freshmen/sophomores and juniors/seniors) to explore these themes in greater depth. All focus group participants were college bound and open to business careers, with diverse representation across gender, region, and school types.

+++

About the Center for Audit Quality

The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility, and transparency of public company audits;</li>
 	<li>Advancing critical issues affecting public company audits;</li>
 	<li>Driving innovation in assurance; and</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

CAQ Releases Updated Research Exploring Key Trends in Accounting Career Pipeline

Press Releases

Talent

The Center for Audit Quality (CAQ) congratulates Chair Paul Atkins on his swearing-in to lead the U.S. Securities and Exchange Commission. Chair Atkins’ deep experience with the SEC and long-standing commitment to investor protection position him well to lead the...

The Center for Audit Quality (CAQ) congratulates Chair Paul Atkins on his swearing-in to lead the U.S. Securities and Exchange Commission. Chair Atkins’ deep experience with the SEC and long-standing commitment to investor protection position him well to lead the Commission at a time of rapid change in the capital markets and corporate reporting. 

The CAQ shares Chair Atkins’ belief in the critical role that independent assurance plays in fostering trust in our financial system.  We look forward to working with him and the full Commission to support policies that strengthen disclosures, elevate transparency, and advance the integrity and resilience of our capital markets. 

“Strong capital markets depend on strong investor confidence — and investor confidence depends on the credibility of the information they rely on,” said Julie Bell Lindsay, CEO of the Center for Audit Quality. “We welcome Chair Atkins’ leadership and look forward to working together to advance thoughtful, forward-looking policymaking that recognizes the vital role of assurance in protecting investors and reinforcing the integrity of our markets.” 

+++ 

About the Center for Audit Quality 

The CAQ champions the public interest in the capital markets by: 
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">Elevating the quality, credibility, and transparency of public company audits; </li>
</ul>
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="2" data-aria-level="1">Advancing critical issues affecting public company audits; </li>
</ul>
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="3" data-aria-level="1">Driving innovation in assurance; and </li>
</ul>
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="4" data-aria-level="1">Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges. </li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

Statement on the Swearing-In of Paul Atkins as Chairman of the U.S. Securities and Exchange Commission

Statements

Company Management

SEC Regulations

AI governance rose on the list of issues committees are considering
NEW YORK, Feb. 12, 2025 — As digital threats continue to mount across industries, cybersecurity remains the top priority for audit committees at public companies, outside of financial reporting and...

AI governance rose on the list of issues committees are considering
NEW YORK, Feb. 12, 2025 — As digital threats continue to mount across industries, cybersecurity remains the top priority for audit committees at public companies, outside of financial reporting and internal controls, according to survey findings released in the “<a href="http://www.thecaq.org/audit-committee-practices-report">Audit Committee Practices Report: Common Threads Across Audit Committees</a>,” a joint effort between Deloitte’s Center for Board Effectiveness and the Center for Audit Quality (CAQ).

On a broader scale, enterprise risk management (ERM), critical to achieving organizational objectives and safeguarding the company’s reputation and stakeholder relationships, is ranked as the second highest priority for audit committees. Finance and internal talent remain the third-highest priority for audit committees.

The report also shows how artificial intelligence (AI) governance is growing in importance as an audit committee consideration, reflective of the rapid adoption of transformative digital technologies that have ushered in a new era of business risk.

A total of 237 respondents participated in this year’s survey, primarily on boards of U.S. (89%) public (86%) companies with $2 billion or more in market cap (72%). Directors on boards of financial services companies made up 27% of the respondents.

Cybersecurity is the chief priority for audit committees
The survey found that 93% of respondents ranked cybersecurity as one of their top three priorities, with 50% ranking it as the leading priority for the audit committee. Further, 71% report cybersecurity is on their agenda on a quarterly basis. Cybersecurity has consistently been ranked as the top priority of audit committees in each of the four years the survey has been conducted, a clear indication that complex and evolving risk will continue to be a focus for audit committees in years to come.

"Cybersecurity remains atop audit committees’ agendas because the stakes have never been higher," said Vanessa Teitelbaum, senior director, Professional Practice, Center for Audit Quality. "With the increasing sophistication of cyber threats and the potential for significant financial, operational, and reputational harm, it’s critical for audit committees to stay ahead. Their continued focus and evolving expertise are essential to protecting organizations in this heightened risk environment."

Audit committee effectiveness remains a priority
In the current economic and geopolitical environment, the corporate reporting landscape is constantly evolving. When presented with various strategies to enhance audit committee effectiveness, more than two-thirds of respondents (69%) felt meetings might be improved by implementing one or more of the following strategies:
<ul>
 	<li>Forty percent of respondents want to improve the quality of presentations during meetings. This jumped from third last year to the top area of improvement this year.</li>
 	<li>Thirty-four percent of respondents want more engagement and discussion from committee members during meetings.</li>
 	<li>While most respondents feel that they have enough time to cover agenda items, some (12%) suggested they could use more time.</li>
</ul>
“As I work with audit committees, enhancing meeting effectiveness remains a top priority. In the face of new and evolving risks, the ability to better prioritize agendas, access comprehensive and timely information, and engage in open and candid discussions are critical factors that will drive efficiency and overall effectiveness,” said Krista Parsons, Audit &amp; Assurance managing director and Governance and Audit Committee Program leader, Center for Board Effectiveness.

Enhanced focus on AI governance
The survey also found an increased emphasis on understanding the impact and usage of AI technologies throughout the organization by the C-suite and board. The number of respondents who identified AI governance as a priority grew year over year, jumping to 35% from 20% last year. A growing portion of audit committees are taking on primary oversight of AI governance (up to 20% from 14% last year). Still, oversight mostly falls with the full board (58%).

Additionally, survey results suggest that work has been done to develop governance structures for AI oversight, with fewer respondents (6%) acknowledging they “don’t know” where AI oversight falls within their organization this year versus last year (17%). Amid ongoing conversations around how organizations govern AI, the question of who should be responsible for primary oversight continues to evolve.

<a href="http://www.thecaq.org/audit-committee-practices-report">Read the report</a>.

About the Survey
The fourth edition of the “Audit Committee Practices Report,” like prior editions, is based on a survey of audit committee members. A total of 237 respondents participated in this year’s survey, primarily on boards of U.S. (89%) public (86%) companies with $2 billion or more in market cap (72%). Those on boards of financial services companies made up 27% of respondents.

About the Center for Audit Quality
The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility and transparency of public company audits.</li>
 	<li>Advancing critical issues affecting public company audits.</li>
 	<li>Driving innovation in assurance.</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

About Deloitte’s Center for Board Effectiveness
Deloitte’s Center for Board Effectiveness helps directors deliver value to the organizations they serve through a portfolio of high-quality, innovative experiences throughout their tenure as board members. Whether an individual is aspiring to board participation or has extensive board experience, the Center’s programs enable them to contribute effectively and provide focus in the areas of governance and audit, strategy, risk, innovation, compensation and succession.

About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 8,500 U.S.-based private companies. At Deloitte, we strive to live our purpose of making an <a href="https://www2.deloitte.com/us/en/pages/about-deloitte/articles/purpose-at-deloitte-us.html">impact that matters</a> by creating trust and confidence in a more equitable society. We leverage our unique blend of business acumen, command of technology, and strategic technology alliances to advise our clients across industries as they <a href="https://www2.deloitte.com/us/en/pages/about-deloitte/articles/technology-consulting-engineering-advantage.html">build their future</a>. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Bringing more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s approximately 460,000 people worldwide connect for impact at <a href="http://www.deloitte.com/">www.deloitte.com</a>.

###

Contact

Kerry Lee
Public Relations
Deloitte Services LP
+1 916 298 8031
kerlee@deloitte.com

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see <a href="http://www.deloitte.com">www.deloitte.com/</a>about to learn more about our global network of member firms.

Cybersecurity, Enterprise Risk Management, and Meeting Effectiveness Are Top Priorities for Audit Committees, According to Deloitte, Center for Audit Quality Survey

Investors

Cybersecurity

Explore how auditors can build on their existing expertise to bring increased trust and transparency to companies' digital asset operations. 
...

Explore how auditors can build on their existing expertise to bring increased trust and transparency to companies' digital asset operations. 


The Role of the Auditor in Digital Assets: Present and Future

Preparers/Issuers

Publications

Happy New Year! We hope you enjoyed (survived?) the holidays. The start of a new year often conjures thoughts of revival, renewal, resolutions and, often, decluttering. Whatever your intention for 2026 – eat healthier, exercise more, save money, spend more...

<img class="aligncenter wp-image-13879" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_AC-Insights_1200x400_600x200.png" alt="Audit Committee Insights" width="650" height="163" />

Happy New Year! We hope you enjoyed (survived?) the holidays. The start of a new year often conjures thoughts of revival, renewal, resolutions and, often, decluttering. Whatever your intention for 2026 – eat healthier, exercise more, save money, spend more time with family, retire, travel, volunteer – we wish you strong resolve and success! We’re keeping abreast of what resolutions policy makers have set in Washington to keep audit committees up to date. Read on!

We welcome input; please <a href="mailto:vteitelbaum@thecaq.org">let us know</a> what you think. Subscribe <a href="https://go.thecaq.org/l/834983/2020-04-22/fskb">here</a> so that you never miss an update from the CAQ.
<h3>Here are 26 considerations for audit committees in 2026: </h3>
<ol>
 	<li><a href="https://www.deloitte.com/us/en/programs/center-for-board-effectiveness/articles/audit-committee-requirements.html">Review and update the audit committee charter</a>.</li>
 	<li>Set a proactive calendar that maps to the audit committee charter responsibilities.</li>
 	<li>Review the audit committee <a href="https://www.spencerstuart.com/research-and-insight/the-road-to-strategic-board-succession">succession plan</a> and consider actions needed in 2026.</li>
 	<li>Plan when your <a href="https://www.thecaq.org/wp-content/uploads/2025/10/caq_external-auditor-assessment-tool-for-audit-committees_2025-10.pdf?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=AC%20Insights%20January%202026">external auditor assessment</a> will be conducted in 2026.</li>
 	<li>Commit to enhancing the <a href="https://thecaq.wpenginepowered.com/wp-content/uploads/2025/12/caq_2025-audit-committee-transparency-barometer_2025-12.pdf?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=AC%20Insights%20January%202026">audit committee report in the proxy statement</a> in 2026.</li>
 	<li>Invite experts to audit committee meetings throughout 2026.</li>
 	<li>Ensure actions from the prior year audit committee self-assessment are in process.</li>
 	<li>Review the external audit partner rotation schedule and consider actions needed in 2026.</li>
 	<li>Schedule tabletop exercises (cyber/AI/transactions) for 2026.</li>
 	<li>Schedule an in-person one-on-one with a new (or new-to-you) C-suite executive.</li>
 	<li>Stop by the audit room and say hello to the external audit team.</li>
 	<li>Meet with the finance and internal audit early career professionals.</li>
 	<li>Unsubscribe from email newsletters that are not helpful (obviously not this one…).</li>
 	<li>Ask a peer for a recommendation for a newsletter or podcast.</li>
 	<li>Have a hard conversation with someone with whom you are having difficulty.</li>
 	<li>Choose one thing to stop doing that isn’t benefiting you.</li>
 	<li>Learn how to do something new using AI.</li>
 	<li>Encourage your company to <a href="https://www.dandodiary.com/2025/12/articles/regulatory-reform/sec-chair-paul-atkins-and-public-company-disclosure-reform/">streamline the 10-K and "root disclosures in the concept of financial materiality."</a></li>
 	<li>Invite a mid-career professional to a networking event of an organization with which you are involved.</li>
 	<li>Schedule extra time on your next business trip to enjoy the city you are visiting.</li>
 	<li>Go deeper with a volunteer organization you care about.</li>
 	<li>Rotate off a commitment you no longer have time for or don’t enjoy.</li>
 	<li>Say “yes” to more than one board.</li>
 	<li>Say “no” to too many boards.</li>
 	<li>Change boards.</li>
 	<li>Praise someone when they do a good job.</li>
</ol>
<h3>Audit Committee Priorities for 2026 </h3>
Using the year-end and new year audit committee resources from EY’s Center for Board Matters, <a href="https://www.ey.com/content/dam/ey-unified-site/ey-com/en-us/campaigns/board-matters/documents/ey-cbm-2026-audit-committee-priorities.pdf">2026 audit committee priorities: navigating complexity and change</a>; PwC’s Governance Insights Center, <a href="https://www.pwc.com/us/en/services/governance-insights-center/library/assets/pwc-year-end-reporting-developments-2025.pdf">Approaching the 2025 year-end financial reporting season, Your guide to year-end reporting developments</a>, and BDO’s Corporate Governance Center’s <a href="https://www.bdo.com/insights/assurance/audit-committee-priorities-for-2026?utm_source=Employee&amp;utm_medium=Social&amp;utm_campaign=BDOConnector&amp;utm_content=None">Audit Committee Priorities for 2026</a>, here is an action plan for 2026:
<ol>
 	<li>Map 2026 risks to scenarios (economic, tariff/trade, cyber/AI, supply chain) and agree on triggers, decision rights, and escalation paths. <a href="https://www.ey.com/content/dam/ey-unified-site/ey-com/en-us/campaigns/board-matters/documents/ey-cbm-2026-audit-committee-priorities-final.pdf">[ey.com]</a></li>
 	<li>Update cyber incident response and AI governance (policy, model risk controls, change management, monitoring); set AC reporting metrics (e.g., time to detect, model drift indicators). <a href="https://www.ey.com/content/dam/ey-unified-site/ey-com/en-us/campaigns/board-matters/documents/ey-cbm-2026-audit-committee-priorities-final.pdf">[ey.com]</a></li>
 	<li>Be aware of leading SEC comment letter themes and focus on non-GAAP measures, MD&amp;A clarity, segment reporting, and revenue recognition; ensure management has remediation plans and disclosure controls aligned with these trends. [<a href="https://www.pwc.com/us/en/services/governance-insights-center/library/assets/pwc-year-end-reporting-developments-2025.pdf">pwc.com</a>]</li>
 	<li>Be aware of the top internal control issues in adverse ICFR management assessments and focus on accounting personnel resources, segregation of duties, information technology, inadequate disclosure controls, and non-routine transactions. [<a href="https://www.ey.com/content/dam/ey-unified-site/ey-com/en-us/campaigns/board-matters/documents/ey-cbm-2026-audit-committee-priorities-final.pdf">ey.com</a>]</li>
 	<li>Assess Pillar Two/global minimum tax impacts (measurement, disclosures, controls) and confirm readiness in tax and consolidation processes. <a href="https://www.pwc.com/us/en/services/governance-insights-center/library/assets/pwc-year-end-reporting-developments-2025.pdf">[pwc.com]</a></li>
 	<li>Challenge impairment and going concern judgments amid interest rate and liquidity dynamics; review refinancing plans and covenant sensitivities.</li>
 	<li>Refresh fraud risk assessment and investigations protocol, including data driven detection and hotline triage; confirm auditor’s use of data analytics and how AC will get insight. <a href="https://www.bdo.com/insights/assurance/audit-committee-priorities-for-2026">[bdo.com]</a></li>
 	<li>Clarify AI in the audit and finance functions: understand where the external auditor uses tech/AI, the benefits/limits, and how management’s AI controls interface with audit procedures. <a href="https://www.bdo.com/getmedia/7d87822a-f53e-48cf-ba0b-bd9387c6edb7/ASSR-CORPGOV-Audit-Committee-Agenda-Q4-2025-Insight.pdf?ext=.pdf">[bdo.com]</a></li>
 	<li>Tighten cyber reporting to the board—define thresholds for “material incident,” board ready dashboards, and linkage to enterprise resilience KPIs. <a href="https://www.pwc.com/us/en/services/governance-insights-center/library/assets/cyber-reporting-final-oct-27-25.pdf">[pwc.com]</a></li>
 	<li>Revisit AC charter, skills, and education plan—ensure technology fluency (AI, data governance), transaction oversight (M&amp;A comeback), and disclosure expertise are covered. <a href="https://www.bdo.com/insights/assurance/audit-committee-priorities-for-2026">[bdo.com]</a></li>
</ol>
<h3>PCAOB Oversight Among Top Priorities for SEC's Chief Accountant </h3>
SEC Chief Accountant Kurt Hohl <a href="https://www.sec.gov/newsroom/speeches-statements/hohl-statement-aicpa-conference-121925">described</a> his priorities during a fireside chat with the CAQ at the 2025 AICPA Conference on Current SEC and PCAOB Developments in December.

In addition to being responsive to emerging issues and focusing on FASB oversight, Hohl described oversight of the PCAOB as a top priority.

“Audit firms have made significant efforts to improve audit quality in recent years. However, the PCAOB and audit firms are also affected by innovation and the changing business environment that comes with it. As the new PCAOB Board gets up and running, [the SEC Office of Chief Accountant] will encourage the Board to evaluate how the changing business environment necessitates changes in the PCAOB’s standard-setting agenda and oversight processes.

For example, we will encourage the PCAOB to take a fresh look at its inspections process, particularly in light of new quality control standards, and to consider whether inspection reports are providing meaningful information to stakeholders. The PCAOB could consider whether shifting its inspection process towards the review of a firm’s system of quality management, corroborated by engagement-level reviews, provides more relevant information about audit quality. We also support a more transparent and responsive audit standard-setting process.

We believe the PCAOB should consider additional transparency in its standard-setting process, for example, adopting an agenda consultation process, similar to the process utilized by the FASB.”

<a href="https://www.sec.gov/newsroom/speeches-statements/hohl-statement-aicpa-conference-121925">Click through</a> to read Hohl's full remarks.
<h3>ICYMI: CAQ Public Policy Technical Alert (PPTA), December 2025 </h3>
Each month, the PPTA highlights and examines the regulatory, standard-setting, legislative, and broader financial reporting developments impacting the public company audit profession. The CAQ’s <a href="https://www.thecaq.org/public-policy-and-technical-alert-december-2025?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=AC%20Insights%20January%202026">December 2025</a> Alert included these featured articles.
<h3>PCAOB Approves 2026 Budget </h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-approves-2026-budget">approved</a> its fiscal year 2026 budget at an open meeting on December 19, 2025. Subject to approval by the SEC, the PCAOB’s budget reflects the resources expected to be necessary for the organization to carry out its statutorily mandated responsibilities under the Sarbanes-Oxley Act. For 2026, the budget is $362.1 million, which is a nearly 10% reduction from fiscal year 2025’s budget.
<h3>FASB Issues New Standard to Improve Interim Reporting </h3>
The FASB <a href="https://fasb.org/news-and-meetings/in-the-news/fasb-issues-new-standard-to-improve-interim-reporting-423439">issued</a> an ASU that improves the navigability of the required interim reporting disclosures and clarifies when that guidance is applicable. It also provides additional guidance on what disclosures should be provided in interim reporting periods. The amendments in the ASU:
<ul>
 	<li>Clarify that the guidance in Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP</li>
 	<li>Create a comprehensive list in FASB Accounting Standards Codification Topic 270 of interim disclosures that are required in interim financial statements and notes in accordance with GAAP</li>
 	<li>Incorporate a disclosure principle, which is modeled after previous SEC guidance, that requires entities to disclose events and changes that occur after the end of the most recent fiscal year that have a material impact on the entity</li>
 	<li>Improve guidance about information included in and the format of interim financial statements.</li>
</ul>
The <a href="https://fasb.org/Page/Document?pdf=ASU%202025-11.pdf&amp;title=Accounting%20Standards%20Update%202025-11%E2%80%94Interim%20Reporting%20(Topic%20270):%20Narrow-Scope%20Improvements">ASU</a>, including transition and effective date information, is available at <a href="https://www.fasb.org/">www.fasb.org</a>.
<h3>What are Americans' New Year's resolutions for 2026? Adults under 30 resolve to be happy. You should too.</h3>
A <a href="https://d3nkl3psvxxpe9.cloudfront.net/documents/New_Years_Resolutions_poll_results.pdf">new YouGov survey </a>explored Americans’ New Year’s resolutions. Adults under 45 are about twice as likely as older Americans to say they will make a New Year’s resolution (43% vs. 21%). Adults under 30 are more likely than older Americans to resolve to be happy and spend more time with family.

The most common New Year’s resolution for 2026 — out of 25 included in the survey — is exercising more. Other popular resolutions include being happy (23%), eating healthier (22%), saving more money (21%), and improving physical health (21%).

Among people who are planning to make a resolution for 2026, 39% say it is very likely they will keep their resolution throughout 2026 and 7% say it’s not very (5%) or not at all (2%) likely.

<img class="" src="https://go.thecaq.org/l/834983/2026-01-12/3svfpb/834983/1768231412Wj9B7ZNh/Screenshot_2026_01_12_at_10.23.15.png" alt="" width="463" height="568" border="0" />

If you made a resolution for 2026, good luck and stick with it!

<hr />

Questions and comments about Audit Committee Insights can be addressed to Vanessa Teitelbaum, Senior Director, Professional Practice (<a href="mailto:vteitelbaum@thecaq.org">vteitelbaum@thecaq.org</a>).

This newsletter is intended as general information and should not be relied upon as being definitive or all-inclusive. The CAQ encourages readers to refer to applicable rules, standards, guidance, and other resources in their entirety. All entities should carefully evaluate which requirements apply to their respective organizations.

Audit Committee Insights | January 2026

Newsletter

As part of the Center for Audit Quality’s (CAQ) ongoing effort to keep members and stakeholders informed on significant public policy and accounting matters, we are pleased to offer the Public Policy and Technical Alert (PPTA). Each month, the PPTA...

Public Policy and Technical Alert | December 2025

PPTA

Welcome back, Audit Insiders!

As we near the end of the year, regulatory bodies and the profession have been busy discussing key issues, from the oversight of emerging technologies like AI to major shifts in regulatory leadership. As we close out...

<img class="aligncenter wp-image-13840" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_DM_WEBSITE-VERSION.png" alt="Audit Insider with Dennis McGowan" width="650" height="163" />

Welcome back, Audit Insiders!

As we near the end of the year, regulatory bodies and the profession have been busy discussing key issues, from the oversight of emerging technologies like AI to major shifts in regulatory leadership. As we close out 2025 and prepare for 2026, our focus remains on reinforcing the trust that underpins the capital markets.  

Read on for what I’m tracking.

Please note that these perspectives are my own. If this email was forwarded to you, <a href="https://go.thecaq.org/l/834983/2020-04-22/fskb">subscribe </a>here so that you never miss a public company auditing update.

<hr />

<img class="aligncenter wp-image-13839" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_DM_1200x400_600x200_WhatsNewinAudit.png" alt="What's new in public company audit" width="650" height="163" />
<h2>SEC &amp; PCAOB</h2>
<h3>PCAOB to Host Open Meeting on 2026 Budget </h3>
On Friday, December 19, 2025, the PCAOB will host an <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/at-december-19-open-meeting--pcaob-to-consider-2026-budget">open meeting</a> to consider the adoption of the PCAOB’s Fiscal Year 2026 budget. Section 109 of Sarbanes-Oxley requires the PCAOB to adopt and approve a budget that then goes on to the Securities and Exchange Commission for approval. Friday will be the meeting where the PCAOB votes on whether to adopt the budget. Once approved, the PCAOB will send the budget to the Securities and Exchange Commission for approval.   
<h3>CAQ Attends the Annual AICPA &amp; CIMA Conference on Current SEC and PCAOB Developments   </h3>
Earlier this month, my colleagues and I attended the annual AICPA &amp; CIMA Conference on Current SEC and PCAOB Developments here in our nation’s capital. Regulators and standard-setters discussed a broad range of auditing, accounting, financial reporting, and regulatory matters. Three key takeaways:  
<ol>
 	<li>Make IPOs Great Again: SEC leadership emphasized the importance of materiality and reducing unnecessary reporting and regulatory complexities and a desire to get back to basics, including materiality. </li>
 	<li>International Coordination: SEC Chief Accountant Hohl discussed a need for greater coordination between U.S. and international accounting and auditing standard-setters to reduce complexity.  </li>
 	<li>Emerging Risks from AI: AI was discussed on a number of panels. SEC staff emphasized the need for registrants be focused on the governance in place to manage the implementation and use of AI. Auditors were reminded of the need to understand and document the model’s design and the importance of maintaining human oversight in AI-driven internal controls. Here at the CAQ, we have shared resources for <a href="https://www.thecaq.org/rota-ai">auditors</a> and <a href="https://www.thecaq.org/ac-oversight-in-the-age-of-genai">audit committees</a> when it comes to AI integration into financial reporting processes.  <span data-ccp-props="{&quot;134233117&quot;:false,&quot;134233118&quot;:false,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559685&quot;:720,&quot;335559737&quot;:0,&quot;335559738&quot;:0,&quot;335559739&quot;:0,&quot;335559740&quot;:276,&quot;335559991&quot;:360}"> </li>
</ol>
SHOUTOUT: This conference is planned by members of the CAQ’s SEC Regulations Committee. A huge thank you to my colleague Annette Schumacher, and Conference Chair, Kyle Moffatt, Conference Vice Chair, Mark Shannon,and the rest of the planning committee who made this conference possible. 
<h3>SEC Chair Paul Atkins Delivers Remarks at the New York Stock Exchange </h3>
On December 2, SEC Chairman Paul Atkins spoke at the New York Stock Exchange. His remarks, “<a href="https://www.sec.gov/newsroom/speeches-statements/atkins-120225-revitalizing-americas-markets-250">Revitalizing America’s Markets at 250</a>,” signaled a significant policy shift aimed at reversing the 40% decline in public company listings. The core of his plan is to reduce the compliance burden for issuers by strictly enforcing materiality as the benchmark for disclosures 

Here at the CAQ, we know the important role that <a href="https://www.thecaq.org/AuditEffect">auditors play</a> in protecting the capital markets and will continue to share resources as the regulatory landscape evolves.  
<h3>SEC Crypto Task Force Addresses Surveillance and Privacy </h3>
On December 15, Commissioner Hester M. Peirce led the SEC Crypto Task Force in a <a href="https://www.sec.gov/newsroom/press-releases/2025-138-sec-announces-agenda-panelists-roundtable-financial-surveillance-privacy">roundtable</a> focusing on the intersection of surveillance and user privacy. The event focused on the conflict between using surveillance to stop financial crime and protecting user privacy in decentralized finance.  
<h2>Deterring and Detecting Fraud</h2>
As investor demand evolves, so does the role of public company auditors. The CAQ is dedicated to providing resources to keep you up-to-date on trending topics in corporate reporting. 
<h3>Fraud Forum Summary </h3>
During this year’s Fraud Awareness Week, the Anti-Fraud Collaboration (AFC) hosted its second Fraud Forum. The event focused on the evolving fraud risk landscape, emphasizing the need for a corporate culture of integrity and accountability. For auditors, audit committees, and management, the mandate is clear: effective fraud deterrence begins with a corporate culture that empowers and protects those who speak up. Keynote speaker Tyler Shultz reinforced the critical role of whistleblowers, calling employee empowerment the strongest defense against fraudulent activity. The forum highlighted the increasing sophistication of fraud schemes leveraging AI and deepfakes, requiring continuous learning and a heightened level of professional skepticism from auditors. A summary of the event is available <a href="https://caqantifraprod.wpenginepowered.com/wp-content/uploads/2025/12/afc_fraud-forum-summary_2025-12.pdf">here</a>. 

As we continue our shared fight against fraud, I encourage you to discover additional <a href="https://antifraudcollaboration.org/fraud-forum-navigating-a-dynamic-fraud-risk-environment/">AFC resources</a> to help protect your organization.  
<h3>AFC Update from AICPA Conference  </h3>
At the annual <a href="https://www.aicpa-cima.com/cpe-learning/conference/aicpa-conference-on-current-sec-and-pcaob-developments">AICPA Conference on Current SEC and PCAOB Developments</a>, I moderated a session on efforts to strengthen financial fraud prevention across the reporting ecosystem through the Anti-Fraud Collaboration. Alongside fellow CAQ panelists Erin Cromwell, Manager, Professional Practice, and Lucy Wang, Director, Anti-Fraud Initiatives, we explored the AFC's four core priorities: understanding emerging fraud risks through benchmarking research, building strong ethical cultures that defend against the fraud triangle, maintaining professional skepticism despite barriers like time pressure and complacency, and leveraging technology including AI and generative AI to detect and prevent fraud.   

Visit the <a href="https://antifraudcollaboration.org/">AFC’s website</a> to explore tools you can use in your own oversight and fraud prevention work. 

<img class="aligncenter wp-image-13838" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_DM_1200x400_600x200_FromtheCAQ.png" alt="From the CAQ" width="650" height="163" />
<h2>Audit Quality</h2>
Audit quality in the U.S. remains strong, but with new technologies, evolving regulatory priorities, and shifting market risks, staying ahead requires continuous attention. The CAQ is actively engaging with stakeholders, providing resources, and leading conversations to help practitioners navigate these changes. Read on for recent news, tools, and upcoming events shaping the profession.
<h3>CAQ Releases the 2025 Audit Committee Transparency Barometer  </h3>
Earlier this month, the CAQ released the 12th annual <a href="https://www.thecaq.org/audit-committee-transparency-barometer">Audit Committee Transparency Barometer</a>. The report revealed a stagnation in many key disclosure areas. While disclosure of the board’s skills matrix reached high rates (90% for S&amp;P 500 companies) and disclosure of cybersecurity expertise on boards increased, other key disclosures, such as the annual evaluation of the external auditor and the factors considered in their reappointment, either remained flat or slightly declined. The report emphasized that this plateau represents a missed opportunity for audit committees to enhance transparency about their evolving oversight responsibilities, particularly regarding emerging risks like AI adoption. Discover further observations <a href="https://www.thecaq.org/audit-committee-transparency-barometer">here</a>. 

<img class="aligncenter wp-image-14537" src="https://www.thecaq.org/wp-content/uploads/2024/03/Header_DM_1200x400_600x200_This-Months-AI-1024x256.png" alt="" width="650" height="163" />
<h3>Audit Insider: Vanessa Teitelbaum </h3>
As 2025 comes to a close, I was happy to sit down with Vanessa Teitelbaum, Senior Director, Professional Practice at the CAQ to reflect on her career and time at the Center for Audit Quality. 
<ol>
 	<li>What led you to a career in accounting and auditing? 
I was an Asian Studies major at Williams college. I didn’t really know what I wanted to do as a career. I took an accounting night class and then I got a job at PwC, such that I was employed and participated in a Master's in Accounting program at NYU that was geared for liberal arts graduates. I thought that I would like accounting, and I was right. The structured career progression at a public accounting firm appealed to me. I stayed at PwC for 14 years. </li>
 	<li>You have been at the CAQ for almost 10 years. What do you enjoy most about your work at the CAQ? 
When I joined the CAQ, it was a leap of faith. I was ready to try something different, but I didn’t really know what the job would entail. I like the people I work with – both internally and externally. We have a great team at the CAQ and wonderful stakeholders – committee and task force members who are dedicated to this profession. I enjoy the public-facing nature of our work. I like networking and meeting new people. I also find our work very intellectually stimulating. We work on interesting problems and solutions that impact the broad ecosystem of financial reporting and auditing. </li>
 	<li>What is your advice to auditors preparing for their very first busy season? 
Be responsive and overcommunicate. I think this alleviates some of the stress during busy season. When someone asks you to do something, acknowledge the request. Tell your supervisor that you are working on something. Let them know if something is taking longer than you expected. Be resourceful but also don’t be afraid to ask for help. If you have a personal or family emergency, talk to your team. And, be the person who helps others. Busy season can be very rewarding when you have good teamwork. </li>
 	<li>Outside of work, you are an accomplished runner, swimmer, and biker. What do you enjoy most about training for marathons, triathlons, and ultra runs?
I love training for a race. Whether it’s a 5-mile trail run or a bigger event like a half-Ironman, it’s fun to have a goal. I especially like training for races with friends. Having a goal keeps me motivated and gets me to the pool or the gym. I love race day. It’s often early in the morning. There is a fun race-day vibe and lots of enthusiasm. I have three goals on race day: finish with a smile, stay out of the medic tent, and make friends along the way. And so far, I always have! </li>
</ol>
&nbsp;

<hr />

<h3 style="text-align: center;">Dennis McGowan</h3>
Vice President, Professional Practice and Anti-Fraud Initiatives

Audit Insider | December 2025

Welcome to another edition of Capital Markets Pulse, a monthly newsletter from the Center for Audit Quality that brings you insights, resources, and tools on the latest issues impacting the capital markets.

As we close out 2025, the profession finds itself...

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The Role of the Auditor in Digital Assets: Present and Future

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Corporate Reporting Trends

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