Washington, DC – The Center for Audit Quality (CAQ) today issued its annual request for proposals (RFP) to fund independent academic research on projects of interest to the auditing profession. The RFP focuses on a number of critical policy issues that are priorities for the CAQ and the public company auditing profession, including audits of internal control over financial reporting (ICFR), auditing of accounting estimates and fair value, corporate social responsibility (CSR) reporting, audit quality indicators, audit committee effectiveness, data analytics, professional skepticism, fraudulent financial reporting, and value of the audit.
The CAQ and the public company auditing profession are dedicated to supporting valuable academic research that can have important real world impact on audit quality and the future of auditing. This marks the eighth year that the CAQ will award grants for independent, scholarly academic research on topics of interest to the profession. The CAQ’s Research Advisory Board (RAB), comprised of representatives from academia and the profession, has awarded 28 grants for independent academic research projects.
“Independent scholarly research has a long history of informing audit practice,” said CAQ Executive Director Cindy Fornelli. “The CAQ is committed to encouraging academics to pursue research on issues in auditing that can advance the profession.”
How to Submit Proposals
To be considered, proposals should be received by Friday, March 18, 2016. Applicants must submit their proposals following the instructions on the CAQ’s online submission form. Proposals will be reviewed by the CAQ’s RAB. Grants will be announced no later than May 31, 2016.
The CAQ has produced a brief video that offers expert guidance and advice on how to develop a successful research proposal, which might be of benefit to applicants. The video examines how to identify a good research question, where to find a good research question, and the tools for executing a successful proposal.
Areas of Interest
For 2016, the CAQ is especially interested in proposals that target a wide range of topics described in the request for proposals. Some of those topics are highlighted briefly below.
Audit firms are making major investments in technologies that will facilitate the use of advanced data analytics in the audit of financial statements, and research can help to inform questions about how these advances might impact practice.
Audits of ICFR
On a macro level, the CAQ is interested in research on the relationship between reported ICFR deficiencies and measures of the quality of financial statements (such measures contemplating restatements, numeric and non-numeric disclosure quality measures and measures of disclosure timeliness, etc.
Auditing Accounting Estimates and Fair Value Measurements
Auditors face many challenges when auditing the more complex accounting estimates and fair value measurements. The CAQ is interested in research that addresses the information that auditors consider when making judgments about accounting estimates.
Audit Quality Indicators (AQI)
The CAQ is interested in research that addresses issues with respect to AQIs and how AQIs can be used to adequately communicate and measure audit quality.
Audit Committee Effectiveness
Audit committees play a critical role in the financial reporting process, and the CAQ is interested in research that will add to the current understanding of the responsibilities, best practices, characteristics, policies, and structure of effective audit committees
At the 2015 CAQ Symposium, participants explored the challenges of providing assurance on CSR information. The group identified several key areas of research: impact of CSR restatements; the relationship between CSR reporting and market performance and/or quality of financial statements; and the value that report users place on CSR assurance.
Professional skepticism is a fundamental element underlying the effectiveness of the external audit. The CAQ is interested in research on the antecedents to and fostering of the proper application of professional skepticism that have the potential to make a meaningful contribution to the extant research.
Interested academics are encouraged to review the full Request for Proposal for additional information on these and other research topics of interest to the CAQ.
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About the CAQ
The Center for Audit Quality (CAQ) is an autonomous, nonpartisan public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high quality performance by public company auditors, convenes and collaborates with other stakeholders to advance the discussion of critical issues requiring action and intervention, and advocates policies and standards that promote public company auditors’ objectivity, effectiveness, and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit www.thecaq.org.