Washington, DC – A new resource from the Center for Audit Quality (CAQ), Emerging Technologies: An Oversight Tool for Audit Committees, provides a framework and questions audit committees may ask management and auditors to help inform their oversight of financial reporting as emerging technologies take hold.
"Today's technological innovation has revolutionary potential for both public company auditing and financial reporting," said CAQ Executive Director Cindy Fornelli. "While emerging technologies present exciting opportunities to enhance audit quality and the financial reporting process, these opportunities are not risk-free. This CAQ resource can help audit committees to build trust and to execute their responsibility to oversee the financial reporting process in an era when technology's capacity to disrupt has never been greater."
Leveraging the work of the Committee of Sponsoring Organizations of the Treadway Commission (COSO), the CAQ's tool oversight framework for emerging technologies has five key components:
- Understand the Company’s Emerging Technology Strategy and Any Specific Technologies Contemplated
- Understand Management’s Risk Identification and Assessment Process
- Understand the Control Activities in Place that Respond to the Identified Risks
- Establish Information and Communication Protocols
- Monitor Emerging Technology Activities
Under each category the publication provides questions to spark dialogue among audit committees, auditors, management and others.
Additionally, the tool also highlights how two technologies—artificial intelligence and robotic process automation—are gaining significant traction in the financial reporting environment. An appendix points to helpful resources on emerging technologies from leading public company auditing firms and governance organizations.
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About the CAQ
The Center for Audit Quality (CAQ) is an autonomous 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 that require 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.
Andrew T. Gillies
Director of Communications