CAQ Year in Review 2020
Wednesday, January 27, 2021
Looking back at this past year, it’s impossible to deny how challenging 2020 has been. It was a year marked by loss, distance, and uncertainty. But amid the challenges, I’ve seen our profession evolve and grow stronger.
At the CAQ, we quickly pivoted to remote work without missing a beat. We adjusted our approach to help public company audit firms navigate the challenges related to the pandemic. And we dramatically adjusted and improved the way we communicate externally. We’re now partnering with stakeholders remotely and increasingly reaching them digitally. Through these rapid changes, we remained laser-focused on our vision to be the recognized leader on all things public company auditing.
I’m proud of what we achieved in 2020:
- Accelerating the Evolution of the Audit: We demonstrated that auditors enhance investor confidence and public trust in the capital markets while laying the foundation for auditors to play a role in company-issued information outside of audited financial statements.
- Improving Audit Quality: We fostered and promoted audit quality as auditors and public companies faced new challenges, including auditing in a remote environment and navigating an increased fraud risk due to the pandemic.
- Attracting Talent: We attracted the next generation of emerging professionals to join the cutting-edge profession of public company auditing.
Looking forward, we will stay true to our mission and the profession that we serve with pride. Our eyes are open to the challenges we’ll face and the opportunities before us. We’re emboldened by the fact that we’re confronting 2021 from a position of strength, a strength that will propel us to advance the profession further and faster than ever before.
Julie Bell Lindsay
Accelerating the Evolution of the Audit
The CAQ published a series of white papers on the Role of the Auditor in Company-Prepared Information, including ESG information, cyber-risk management information, and non-GAAP information. As part of the profession’s efforts to advance auditor assurance on ESG information, the CAQ hosted a research panel of senior ESG investors to gain insight into their perception of, and desire for, ESG assurance.
The CAQ launched an online storytelling platform, Audit in Action, with dynamic stories about auditors stepping up to contribute to the orderly operation of capital markets.
Improving Audit Quality
Adapting to the pandemic, the CAQ launched a COVID-19 Resource Center, a hub for resources and webisodes, designed to help maintain audit quality as companies and auditors confronted new challenges. Underpinning these practitioner resources, the CAQ supported academic research through the annual Symposium and academic studies. Establishing an Audit Committee Council and Audit Committee Newsletter helped get these critical academic and practitioner resources into the hands of an important stakeholder group charged with overseeing the audit process.
The CAQ also launched the Fighting Fraud campaign and a series of Anti-Fraud Collaboration resources on company culture and professional skepticism to raise awareness of the heightened risk of fraud during the pandemic. These resources helped empower financial reporting stakeholders with the tools to deter and detect fraud.
Creating a marquee moment for the auditing profession, the CAQ sponsored a first-of-its-kind career exploration documentary, Making It Balance. It’s an incredibly authentic and inspiring story of three diverse young adults who take a road trip, in an RV, around the country to interview accounting and auditing professionals.
The imperative for greater diversity within the profession only amplified CAQ’s talent focus in 2020. The CAQ convened the Chief Diversity Officers of the Governing Board firms to identify new and existing ways to attract, retain, and promote diverse talent. The Governing Board also chartered a multi-stakeholder working group to explore alternative means to meet the additional 30 hours in the 150-hour requirement to obtain a CPA license.
By the Numbers
As we enter 2021, many of the challenges and opportunities that emerged last year continue to drive the focus of the CAQ’s work. The pandemic endures, fraud risk remains high, a new US administration takes office, diversity remains a priority, and investors increasingly call for company-reported information outside of the financial statements. The CAQ remains committed to helping our member firms navigate this landscape while continuing to focus on our goals to evolve the role of the auditor, promote audit quality and fight fraud, and attract the next generation of talent.
In early 2021, the CAQ-led Anti-Fraud Collaboration launched the Mitigating the Risk of Common Fraud Schemes report. It’s a data-rich report that analyzes five years of SEC enforcement actions to identify trends in financial statement fraud.
We will partner with the Council of Institutional Investors to convene a roundtable of investors and audit professionals to discuss the role of the auditor in enhancing the reliability of ESG information with third-party assurance.
We will continue to support and enhance the profession’s efforts to increase the diversity in our ranks, both in the talent pipeline as well as by retention and promotion of diverse talent within the firms.
As we continue into 2021, the profession has never been in a stronger position to confront challenges and seize the opportunities before us.