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Serving investors, public company auditors and the markets.

The Center for Audit Quality is the recognized leader – inside and outside of the profession – on all things public company auditing: resource provider, thought leader, and convener.

Our mission

CAQ is a nonpartisan public policy organization serving as the voice of U.S. public company auditors and matters related to the audits of public companies. To achieve our mission, we:

  • Promote high-quality performance by U.S. public company auditors;
  • Convene capital market stakeholders to advance the discussion of critical issues affecting audit quality, U.S. public company reporting, and investor trust in the capital markets; and
  • Informed by independent research and analyses, champion policies and standards that bolster and support the effectiveness and responsiveness of U.S. public company auditors and audits to dynamic market conditions.

The CAQ has established itself as a force in public company auditing, thanks to its convening power, its constructive policy engagement, and vision for the profession’s future.

Julie Bell Lindsay, Chief Executive Officer, CAQ

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Our values

Integrity
Integrity is a driving force at the CAQ to build a fair, honest, and genuine working environment, which reflects our mission to promote integrity in the corporate reporting ecosystem.

Excellence
Excellence is the results-driven production of high-quality work with strategic and intentional purpose to achieve our mission and organizational goals.

Diversity & inclusion 
At the CAQ we understand the power that comes from bringing a variety of voices and backgrounds to the conversation. In our work, we advocate for the advancement for people of color, promote diverse opportunities, and encourage a diversity of thought.

Teamwork 
Teamwork is recognizing and leveraging the CAQ’s employees, our stakeholders, and the profession’s skills and perspectives in a constructive way to advance our mission and achieve common goals.

Transparency  
Transparency is communication and actions that help ensure an environment of healthy and efficient knowledge-sharing with our colleagues, our stakeholders, and across the profession.

Our History

Since its founding in 2007, the CAQ has pursued an overarching mission of enhancing investor confidence and public trust in the global capital markets.

The CAQ’s founding

In the spring of 2000, the dotcom bubble burst, leading to the bankruptcies of once high-flying companies like Pets.com and eToys. Fraud and accounting scandals also helped bring about the failure of companies considered blue chip—such as Enron and WorldCom—and high-ranking executives from those companies would eventually be imprisoned. In connection with Enron’s demise, one of the largest audit firms, Arthur Andersen LLP, was convicted of obstruction of justice in June 2002. That conviction was overturned in 2005 by the U.S. Supreme Court, but, by that time, the firm had already collapsed.

These events, along with a spike in corporate earnings restatements, shook financial markets and investor confidence in them. The NASDAQ Composite Index, for example, dropped 78 percent from spring 2000 to fall of 2002.

The policy response was equally intense. As noted by the Securities and Exchange Commission (SEC) Historical Society, a “groundswell of support” drove the reform of corporate governance standards and the passage of the Sarbanes-Oxley Act of 2002 (SOX). The vote counts for the legislation were extraordinary: 99-0 in the U.S. Senate, and 423-3 in the House of Representatives. President George W. Bush signed SOX into law on July 30, 2002, and implementation proceeded relatively quickly thereafter.

SOX: The basics

At the broadest level, SOX was designed to increase the reliability of financial reporting and to improve audit quality. It worked towards these goals in several ways.

  • Greater executive accountability: Under SOX provisions, chief executives and chief financial officers must certify financial reports.
  • Independent audit committees: The law required that public companies have audit committees that are independent of management and that exercise direct oversight over financial reporting. It also made audit committees, not management, responsible for hiring, compensating, and overseeing the external auditor.
  • Enhanced auditor independence: SOX established rules such as lead engagement partner rotation, as well as the prohibition on certain non-audit services to audit clients.
  • The PCAOB: SOX provided a new framework of oversight of public company audits through the establishment of the Public Company Accounting Oversight Board (PCAOB), which not only sets standards for public company auditing firms, but also has inspection and enforcement authority.

For an overview of the Sarbanes-Oxley Act of 2002 (SOX) click here.

Effective regulations and embracing change

The passage of the Sarbanes-Oxley Act of 2002 (SOX) reformed financial reporting, including the creation of the Public Company Accounting Oversight Board (PCAOB), a regulator responsible for the independent oversight of the public company auditing profession. Audit firms are required to comply with the PCAOB’s auditing and quality control standards as well as auditor independence rules. The US Securities and Exchange Commission (SEC) has oversight responsibility of the PCAOB.

For its part, the public company auditing profession embraced change. “Change is necessary, and we intend to be full partners in driving meaningful and purposeful change,” wrote American Institute of CPAs (AICPA) Chairman William F. Ezzell, then a partner at Deloitte & Touche, in December 2002. “We will give the PCAOB our dedicated assistance and support in all its aspects and dimension.” Two years later, James Turley—who served as Global Chairman of EY until 2013, as well as the CAQ’s first Governing Board Chair—told Congress: “While nobody likes to be inspected by their regulator, I truly believe that Ernst & Young and the entire profession will be the better for it.”

The CAQ takes flight

In 2005, AICPA leaders voted to create the Public Company Auditors’ Forum, comprised of the AICPA, large audit firms, and public members. It was envisioned that the Forum would be an autonomous organization affiliated with the AICPA. In contrast with the AICPA—whose hundreds of thousands of members practice across business and industry, public practice, government, education, and consulting—the Forum would be a public policy entity focused exclusively on public company audits.

Two years later, in January 2007, this fledgling organization took flight as the Center for Audit Quality (CAQ). Led by Executive Director Cindy Fornelli, the CAQ embarked immediately on a multi-month public dialogue tour to discuss with a variety of stakeholders potential improvements to the quality, relevance, and integrity of financial reporting.

With a staff including a team of CPAs—along with experts in policy, research, stakeholder engagement, communications, and operations—the CAQ also worked quickly to develop a range of resources for its members (public company accounting firms) and key stakeholders: guides, white papers, alerts, videos, research reports, investor surveys, and more. All of these resources remain available free of charge on the CAQ website.

In keeping with its mission, the CAQ also began engagement and collaboration with key stakeholder groups, including academics, audit committees, preparers, internal auditors, investors, and others. In 2009, for example, it launched a major series of events focused on financial reporting fraud, a precursor to the formation of the Anti-Fraud Collaboration in 2010.

In March 2019, with Cindy Fornelli retiring after 12 years at the CAQ, the Governing Board unanimously approved Julie Bell Lindsay as the CAQ’s second Executive Director. Upon taking her new role, Lindsay observed that “the CAQ has established itself as a force in public company auditing, thanks to its convening power, its constructive policy engagement, and vision for the profession’s future.”

Since its founding, the CAQ team has expanded, innovated, contended with economic crisis and market swings, and addressed myriad issues affecting the public company auditing profession at home and globally. Through it all, however, the CAQ has kept an unwavering focus on serving its members and building investor confidence in capital markets.

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