CAQ Snapshot: April 2018
Wednesday, April 25, 2018
CAQ Tool Helps Boards Oversee Cybersecurity Risk Management
As regulators and investors scrutinize cybersecurity vulnerabilities and related disclosures by public companies, the Center for Audit Quality (CAQ) has released a tool to assist board members in their oversight of enterprise-wide cybersecurity risk management.
Cybersecurity Risk Management Oversight: A Tool for Board Members provides questions board members can use as they discuss cybersecurity risks and disclosures with management and CPA firms. The tool also compiles cybersecurity-related resources from the CAQ, the American Institute of CPAs (AICPA), the National Association of Corporate Directors (NACD), and others.
“Boards of directors face an enormous challenge in overseeing how their companies manage cybersecurity risk,” said CAQ Executive Director Cindy Fornelli. “Our tool can help foster dialogue that is crucial to addressing cybersecurity challenges and to establishing a clear understanding of cybersecurity roles and responsibilities.”
In separate cybersecurity news, the CAQ released a Profession in Focus video featuring EY Partner Andrew Cotton. Cotton discusses increasing efforts by companies to manage cybersecurity risks, the “very big investments” CPA firms are making in cybersecurity expertise, and the potential benefits of the American Institute of CPA’s SOC for Cybersecurity framework. “There’s a lot of positive movement by corporations, by their management, and by their boards in the cybersecurity area, in terms of managing enterprise risk,” he said.
New CAQ Resource for Audit Committees: Preparing for the Leases Accounting Standard
The CAQ published a new tool designed to help audit committees exercise their oversight responsibilities as companies implement the new leases accounting standard that begins to take effect in January 2019. Preparing for the Leases Accounting Standard: A Tool for Audit Committees includes an overview of the new standard and offers important questions for audit committee members to consider for successful implementation.
The tool emphasizes that the new standard will impact multiple divisions within an organization, including accounting, tax, financial reporting, financial planning and analysis, investor relations, treasury, procurement, and real estate. The standard also begins to take effect just one year after the effective date of the new revenue recognition standard, another high-profile accounting change that requires significant implementation effort by company management and boards.
Awards Announced for Access to Audit Personnel Program
The CAQ and the Auditing Section of the American Accounting Association (AAA) announced three awards for the Access to Audit Personnel Program, which connects academics with audit practitioners to participate in research projects. This year’s awardees will have access to 430 audit staff and managers at CAQ Governing Board firms.
“The Access to Audit Personnel Program is important for promoting accounting and audit academic research,” said Rick Hatfield, President of the AAA Auditing Section and Fayard Endowed Chair in Accounting at the University of Alabama. “We are pleased to help researchers clear a major hurdle of academic research by connecting them with real-life auditors.”
PCAOB Survey: Help Inform the PCAOB’s Strategic Plan
Each year, the Public Company Accounting Oversight Board (PCAOB) prepares a strategic plan with a five-year outlook. Following the recent appointment of five new Board members, the PCAOB is taking a fresh look at the organization and its future direction in fulfilling its mission. As part of those efforts, the PCAOB is fielding a survey to obtain the views of key stakeholders, such as investors, auditors, preparers, audit committee members, and academics. The survey, which may be taken anonymously, requires roughly 15 minutes to complete, with responses requested by May 15, 2018.
Opportunities and Challenges in Updating the Auditor’s Reporting Model
What opportunities might arise from updating the auditor’s reporting model in the United States, and what are related challenges for audit committees and others? In an April post for the NACD Board Leaders’ blog, CAQ Executive Director Cindy Fornelli provides perspective on these questions, leveraging discussion at a recent expert panel on the auditor’s report hosted by the American Accounting Association.
In addition to Fornelli, the AAA panel featured Phillip Austin, the National Managing Partner of Auditing at BDO USA LLP; Marty Baumann, PCAOB Chief Auditor and Director of Professional Standards; Dan Sunderland, Chief Auditor and National Leader for Audit and Assurance Services at Deloitte & Touche LLP; and Scott Zimmerman, EY Partner and Americas Assurance Innovation and Digital Leader.
#BuildingaBedrock: CAQ Focuses on Sustainability
Sustainability is “increasingly part of the conversation in the boardroom,” said Mary Schapiro, Vice Chair of the Advisory Board at Promontory Financial Group and CAQ Governing Board member, in an April Q&A feature with Cindy Fornelli on LinkedIn. “The attention boards give to these issues will continue to grow as a result of the operational, reputational, and financial risks they present,” predicts Schapiro, a former Securities and Exchange Commission Chair who, among other appointments, now serves as Vice Chairman of the Sustainability Accounting Standards Board (SASB).
The Fornelli–Schapiro Q&A was part of the CAQ’s monthlong focus on business and environmental sustainability as a part of how the public company auditing profession is “building a bedrock” foundation for investor confidence and capital markets. Throughout April, the CAQ has highlighted the profession’s sustainability work and role, such as the AICPA’s initiatives related to sustainability reporting and assurance.
Additionally, the CAQ released a sustainability-themed Profession in Focus video featuring Jean Rogers, PhD, PE, SASB Founder and former Chair of the SASB Standards Board. In the interview, Rogers discussed the “journey” of sustainability and the SASB’s groundbreaking efforts to create new sustainability insights for key capital markets players. “We’re at a really transformational moment,” she said.
The CAQ’s theme for the month of May will be “endurance.” Follow along and join the conversation on social media using #BuildingaBedrock.
Join the CAQ at These Upcoming Events
Sustainability Investment Leadership Conference
May 2 | New York, New York
Join the discussion about good governance, environmental sustainability, and social stewardship at the Sustainability Investment Leadership Conference.
Women Corporate Directors (WCD) Global Institute
May 9–11 | New York, New York
We look forward to seeing our director colleagues at the WCD Global Institute. CAQ Executive Director Cindy Fornelli will moderate a panel on “Decision Making in the Visionary Boardroom.”
2018 Accounting Professional Diversity Pipeline Symposium
May 14–16 | Atlanta, Georgia
We are delighted to participate in the Diversity Pipeline Symposium, which will focus on bringing together firms, state societies, and colleges and universities to discuss how to help the accounting profession sustain diverse talent.
Deloitte/University of Kansas Auditing Symposium
May 17–19 | Lawrence, Kansas
Join the CAQ at the Deloitte and University of Kansas Auditing Symposium. On May 17, Cindy Fornelli will moderate the panel “Innovations in Auditing,” which will also feature speakers from Deloitte, Grant Thornton, and the PCAOB.
Teachers of Accounting at Two-Year Colleges Conference
May 17–19 | Tampa, Florida
The CAQ is pleased to support the Teachers of Accounting at Two-Year Colleges Conference. The CAQ’s Crystal Cooke, Senior Project Manager, will moderate the panel “Building Bridges to the Future,” with panelists Sidney Askew, Community College Professor and President of the two-year college section of AAA; Tom Marsh, Assistant Dean & Associate Professor of Accounting, Northern Virginia Community College; and Julie Peters, US University Relations Leader, PwC.
International Corporate Governance Network (ICGN) Annual Conference
June 25–28 | Milan, Italy
We look forward to seeing our international investor and governance colleagues at ICGN’s annual conference. Join the CAQ at 3:30 p.m. on June 26 for our session on “Fiduciary Duty in Challenging Times.”