Welcome back, Audit Insiders. Spring is here, bringing with it some extra sun and plenty of pollen. For us in the financial reporting ecosystem, it certainly has been an action-packed Q2, full of updates from regulators and standard setters. One of my favorite weekends is upon us though – Memorial Day Weekend – and the unofficial start to summer.
Here in Washington, D.C., the SEC has welcomed Chair Atkins and hosted several roundtables, while the PCAOB has been sharing resources for audit firms, and Members of Congress are contemplating the future of public company audit oversight. At the CAQ, my colleagues have been just as busy, hosting a webinar on the 2025 Audit Committee Practices Report and launching new publications. Can you believe we are almost halfway through Q2?
Read on for the latest issues I’m tracking and resources from the profession to assist audit practitioners.
Please note that these perspectives are my own. If this email was forwarded to you, subscribe here so that you never miss a public company auditing update.
SEC
Paul Atkins Confirmed as New SEC Chair
On April 9, the Senate voted (52-44) to confirm Paul Atkins as the newest chair of the SEC. Following the confirmation, Acting SEC Chair Mark Uyeda, Commissioner Peirce, and Commissioner Crenshaw released a statement welcoming the confirmed Chair. On April 21, Paul Atkins was officially sworn in as the new SEC Chairman.
- CAQ take: Along with my colleagues, I congratulate Chair Atkins on his new chapter at the SEC. 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.
SEC Announcement on Crypto Task Force Staff and Upcoming Roundtables
In March, the SEC announced the members of the Crypto Task Force staff, which will advise the SEC on matters related to cryptocurrency. The task force is composed of staff from the Acting Chairman’s office and other divisions and offices across the Commission.
In addition, the SEC announced that its Crypto Task Force will host a series of roundtables to discuss key areas of interest in the regulation of crypto assets. The “Spring Sprint Toward Crypto Clarity” series began on March 21 and has hosted two events:
- The inaugural roundtable: How We Got Here and How We Get Out – Defining Security Status (Part 1 and Part 2 recordings)
- The April 11th roundtable: Between a Block and a Hard Place: Tailoring Regulation for Crypto Trading (Part 1 and Part 2 recordings)
Information regarding the agendas and speakers for future roundtables can be found on the Crypto Task Force webpage.
SEC’s Roundtable on AI and Use Cases
On March 27, the SEC hosted its roundtable on AI in the financial reporting industry. The roundtable included opening remarks from then Acting Chairman Mark Uyeda, Commissioner Hester Peirce, and Commissioner Caroline Crenshaw. There were panels on “The Benefits, Costs, and Uses of AI in the Financial Industry,” “Fraud, Authentication, and Cybersecurity,” “AI Governance and Risk Management,” and “What’s Next/Future Trends.”
- CAQ take: We recognize the importance of AI and its integration into financial work streams. As a result, we have produced resources for auditors and audit committees to elevate their understanding of Generative AI and what it means for financial reporting and the audit.
SEC Ends Defense of the Climate Disclosure Rule
On March 27, the SEC voted to end its defense of the rules requiring disclosure of climate-related risks and greenhouse gas emissions. The rules, adopted by the Commission on March 6, 2024, create a detailed and extensive special disclosure regime about climate risks for issuing and reporting companies. Since its adoption, the rule has faced a series of challenges from states and private parties.
- CAQ take: My colleagues and I recognize the importance of consistent, comparable, and reliable assurance. To this end, we will continue to work with all relevant parties to promote investor confidence in the information they rely on when making important decisions. We recently submitted comments to the California Air Resources Board on the state’s climate disclosure legislation, emphasizing our focus on assurance.
All four SEC Commissioners address audience at PLI’s SEC Speaks Conference
In separate remarks, SEC commissioners discuss the shift in the agency’s focus under the new Trump administration, including its approach to cryptocurrency and previously finalized SEC rules. Chairman Atkins stated, “While I have directed Commission staff across our policy Divisions to begin drafting rule proposals related to crypto, the staff continue to “clear the brush” through staff-level statements.” He also stated, “I will ensure that innovation will be ingrained in the culture SEC-wide, as it should be, and not focused on one small office.”
- CAQ take: Public company auditors have long been innovative and adaptive to the needs of our capital markets and the CAQ looks forward to working with the SEC as it works to implement its priorities.
PCAOB
On April 30, the House Financial Services Committee voted affirmatively on legislation that would move PCAOB responsibilities into the SEC, while shuttering the non-profit regulator within a year of the legislation’s passage. The proposal still has steps to climb before it becomes law. Regardless of the outcome, what won’t change is the profession’s commitment to providing capital market stakeholders with high audit quality. The CAQ believes strong oversight of the public company audit profession recognizes the pivotal role auditors play in fostering trust in our capital markets, supports high standards of audit quality and provides for long-term economic growth. No matter where this oversight resides, the CAQ is committed to collaborating with policymakers to preserve and enhance the independence, expertise, and transparency that underpin effective oversight of the public company audit profession and define the U.S. capital markets today. As the CAQ’s CEO Julie Bell Lindsay recently said: “Oversight models may evolve, but what should not change is the profession’s accountability to the capital markets and the need for a system that supports maintaining high standards of audit quality. The CAQ has a long history of working with policymakers to bring the collective voice of the public company audit profession to bear on policies that protect investors and promote high-quality audits, and we will continue to do so.”
PCAOB Shares Resources on Latest Quality Control Implementation Efforts
At an open meeting on March 19, the PCAOB staff provided the Board with an overview of the latest implementation efforts related to QC 1000, A Firm’s System of Quality Control, with a specific focus on the monitoring and remediation process. Watch the recording here.
Additionally, the PCAOB has posted several staff presentation videos designed to help auditors implement QC 1000. The videos cover topics like the monitoring and remediation process, acceptance and continuance, engagement performance, people resources, and more. The QC 1000 implementation resources, including these videos, can be found here.
For smaller audit firms looking to learn about the practical implementation of QC 1000, the PCAOB is hosting a series of in-person workshops. The first workshop was held on May 13th, 2025, and they will host another workshop on June 17, 2025. For more information and to register, click here.
- CAQ take: The PCAOB staff are working diligently to assist firms in implementing recently adopted standards. As the staff moves forward, the CAQ continues to encourage the release of interpretive written guidance, such as FAQs, particularly as the PCAOB receives feedback at workshops and through engagement with firms and other stakeholders.
PCAOB Releases 2024 Global Network Firms Inspection Report
In March, the PCAOB released 2024 inspection reports for the six U.S. Global Network Firms (GNF). The reports were released five months earlier than last year’s results. Take a look at the key findings here.
- CAQ take: While PCAOB inspection reports provide us with important information about the engagements selected for inspection and any findings, they are not the sole measure of audit quality, nor are they intended to be. That being said, the aggregate number part 1.A. findings in the latest round of reports was 26% of GNF audits inspected in 2024, down 34% in 2023. The deficiency rate fell out all 6 GNF firms. There were 2 restatements as a result of the 2024 GNF inspection findings.
PCAOB Shares Perspectives From 2024 Conversations With Audit Committee Chairs
On May 15, the PCAOB shared key takeaways from their engagement with audit committee chairs in 2024. The staff spotlight publication also provides answers to questions that audit committee chairs frequently raise when engaging with PCAOB staff.
- CAQ take: It is useful to see what is on the minds of the audit committee chairs the PCAOB met with as part of their 2024 inspections. The PCAOB staff met with close to 300 audit committee chairs, approximately 78% of whom had not met with the PCAOB before. A large majority of the audit committee chair meetings were related to inspections of US Global Network Firms. The PCAOB asked audit committee chairs what topics they spent most of their time discussing with their auditors. Common topics included 1) factors affecting relationships with the audit firm, 2) firm inspection reports, 3) economic environment affecting the audit, 4) application of accounting and auditing standards.
PCAOB Publishes New Resource to Help Smaller Audit Firms Address Challenges of Auditing Accounting Estimates
On May 21, the PCAOB published a new resource on auditing accounting estimates. The resource shares key reminders for auditors relating to auditing accounting estimates, PCAOB staff’s perspectives on common deficiencies, and good practices implemented by smaller audit firms around accounting estimates.
Audit Quality
Audit quality in the U.S. remains high, but considering economic uncertainty, emerging developments, and demands on talent, audit practitioners should stay vigilant of the latest developments impacting audit quality. Read on for recent news, tools, and resources.
The Role of Audit Committees in 2025 and Beyond
Following the release of the 2025 Audit Committee Practices Report, my colleague, Vanessa Teitelbaum, shared her perspective on what the future looks like for audit committees. From cybersecurity and enterprise risk management to finance and internal audit talent, the role of audit committees is expanding beyond the traditional oversight of financial statements and internal control over financial reporting. Learn how audit committee leaders can respond to this changing shift.
What Does the Future of Work Look Like?
Audit committees are not the only ones who are evolving; the workplace landscape is changing as well. Companies that swiftly transitioned to remote work during the pandemic are now exploring ways to bring employees back to the office full-time, implement hybrid models, or establish long-term remote work policies. My colleague, Lucy Wang, unpacks how the changing work landscape impacts culture. Read how organizations can be flexible and nimble during this time.
Four Years In: How Accounting+ Is Changing the Narrative
Since launching Accounting+ four years ago, the CAQ has remained focused on reshaping how high school and early college students see the accounting profession. By highlighting the exciting, high-reward, and wide-ranging career opportunities in accounting, we’ve made meaningful progress, but there’s still work to be done.
In 2024, we commissioned a follow-up study to better understand how students’ perceptions have evolved and where we must go next to strengthen the pipeline. Our latest report, Expanding the Accounting Profession Pipeline, offers fresh insights and clear recommendations for attracting the next generation of talent. Read the full publication for key takeaways and actionable guidance.
The Audit Effect: The Evolving Role of the Auditor
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.
The Role of the Auditor in Climate-Related Information
As more companies report climate-related information, investors, regulators, and other stakeholders are placing greater emphasis on the reliability of these disclosures. They need to know the data they are seeing is accurate, consistent, and trustworthy. That’s where auditors come in.
The CAQ’s new resource, The Role of the Auditor in Climate-Related Information, explores how auditors help enhance the credibility of climate data and what their role means for the future of sustainability reporting. Read on for actionable insights.
Deterring and Detecting Fraud
To elevate the profession’s understanding of fraud and the vital role that auditors play in this landscape, the CAQ collaborates with the Anti-Fraud Collaboration (AFC) to produce insights and actionable recommendations to strengthen the profession against fraud risk.
Stronger Culture, Stronger Fraud Prevention
A strong corporate culture is one of the most effective tools in preventing fraud, especially in today’s evolving work environment.
As a proud member of the Anti-Fraud Collaboration (AFC), we support efforts to strengthen fraud prevention across the financial reporting ecosystem. The AFC’s latest resource, The Impact of a Changing Work Environment on Corporate Culture, provides timely insights and practical guidance for organizations navigating new workplace dynamics. Read how your organization can cultivate a robust culture centered on integrity and ethics.
How Effective Is Your Fraud Investigation Team?
Fraud investigation teams are a critical line of defense against financial and reputational damage, but how do you know if yours is truly effective?
The Association of Certified Fraud Examiners (ACFE), a member of the AFC, recently released its 2025 Benchmarking Report. The publication offers fresh insights from its latest survey, providing data that can be used to compare fraud investigation teams with those at other organizations. Read how leaders and anti-fraud professionals can evaluate the efficiency of their investigative efforts, identify areas for improvement, and make informed decisions about future anti-fraud strategies.
In each edition, we feature leaders in the audit profession. This month, we are featuring Matt Schell, Managing Partner at Crowe.
Q: From your perspective, how does independent assurance support the health and functioning of capital markets?
A: The capital markets function efficiently and effectively when participants have high-quality, reliable data to use in making capital allocation decisions. The financial statements produced by companies are a critical piece of data available to capital market participants. While the financial statements are subject to a system of internal controls designed to prevent or detect material misstatements within the financial statements, as required by SEC rules and regulations, the assurance provided by independent auditors gives capital market participants an objective and impartial opinion on the presentation of the financial statements they are using to make those critical investment decisions.
Q: Assurance plays a critical role in building trust in capital markets, and trust in turn is what attracts investment. Why do you think this connection is often overlooked or underappreciated?
A: Capital market participants often overlook the full financial reporting process of public company financial statements, from recording transactions to preparing statements for investment decisions. Management is responsible for preparing the financial statements, but other parties also contribute to high-quality financial statements. The SEC recognizes the roles of the audit committee and the independent auditor. The audit committee oversees the accounting and financial reporting processes, the audit of the financial statements, and the auditor.
Auditors, known as gatekeepers, evaluate management’s assertion that the financial statements comply with the relevant accounting standards. This includes examining and testing the amounts and disclosures within the financial statements. For certain public companies, auditors also evaluate the issuer’s internal control over financial reporting. These procedures build trust in the financial statements used by capital market participants.
When capital market participants receive financial statements through SEC filings, it may seem that management simply prepares and provides these statements. However, before filing, the financial statements undergo review procedures by both the audit committee and the auditor.
Q: What do you wish that capital market stakeholders better understood about what auditors really do and why it matters?
A: One aspect of the audit that capital market participants might not fully appreciate is the depth of understanding that auditors need to have about the company they are auditing and the industry in which that company operates. Auditors need to have that deep understanding in order to identify and assess risks of material misstatement, including potential fraud risks, that are unique and specific to the company being audited. Without that understanding, auditors may not appropriately evaluate complex management judgments or assess the application of accounting principles specific to that industry.
While most capital market participants have heard the terms professional skepticism, independence, due professional care, and other key principles, it cannot be overstated the importance of these principles to what the auditor does. These principles require auditors to – among other things – maintain an attitude that includes a questioning mind and objective mindset throughout all aspects of the audit; be objective and impartial in making judgments – including being aware of our own biases; and seek individuals with specialized skill and knowledge when the technical competence does not reside within an engagement team member. These principles are foundational to the audit and are embedded in the work that auditors do each and every day.
Q: The role of auditors in ensuring the reliability of company information and the nature of the information disclosed by companies has changed over the past 20 years. How might the role of auditors continue to evolve to address these demands?
A: As companies evolve their financial and non-financial information disclosure, stakeholders will use this new data to assess risks. Capital market participants seek high-quality, reliable information for investment decisions. Historically, stakeholders have demanded assurance over such information, starting with management-provided data, progressing to limited assurance, and eventually reasonable assurance as familiarity grows.
Auditors have a strong reputation for providing assurance over financial and non-financial information, built on a foundation of professional ethics, independence, high-quality standards, quality control systems, and fundamental behaviors emphasizing audit quality. These attributes position the audit profession to play a crucial role in future corporate reporting.
Dennis McGowan
Vice President, Professional Practice and Anti-Fraud Initiatives