CAQ Snapshot: August 2015
Monday, August 17, 2015
Seventh Annual CAQ Symposium Looks Ahead to the Future of Audit
Top practitioners from the public company auditing profession gathered with leading academics at the Center for Audit Quality (CAQ)’s Seventh Annual Symposium, held this year on August 9 in Chicago. The event, which coincides with the American Accounting Association’s Annual Meeting, is a key part of the CAQ’s ongoing dialogue with the academic community on how research can inform audit practice.
|Catherine M. Engelbert, CEO of Deloitte LLP and CAQ Governing Board member, delivers opening remarks at the CAQ Symposium.|
As in past years, the 2015 Symposium included panel discussions on critical issues. Given the event’s broader theme–“The Audit and Engagement Team of the Future”–this year’s panels covered emerging technologies and data analytics, as well as the role of the auditor in light of in light of growing interest in assurance around corporate responsibility and sustainability reporting.
Stay tuned for video from the 2015 Symposium panel discussions, which will be made available on the CAQ’s website and YouTube channel.
CAQ and AAA Auditing Section Seek Proposals for Access to Audit Personnel Program
The CAQ and the Auditing Section of the American Accounting Association (AAA) announced a request for proposals for a joint program designed to assist accounting and auditing academics in their ability to gain access to audit firm personnel to participate in research projects. The CAQ and the Auditing Section of the AAA initiated the program in 2012 to provide access to audit firm personnel for doctoral students and assistant professors seeking tenure, so that they could conduct behavioral research studies on issues related to audit practice.
A review committee of well-respected senior academics and audit partners assess the proposals based on criteria such as methodological soundness, potential contribution to academic literature, and ability to address important research questions that are relevant to practice. Proposals, which may be submitted using an online application process, are due by February 1, 2016.
Fornelli Urges Stakeholders to Weigh in on SEC Audit Committee Disclosure Concept Release
It is “critically important” that audit committee members and investors provide their input on a concept release from the Securities and Exchange Commission (SEC) regarding audit committee disclosure, said CAQ Executive Director Cindy Fornelli in an August interview on “Inside America’s Boardrooms.” The SEC, she said, “really needs to hear from those constituencies.”
Unveiled on July 1, the SEC’s concept release focuses on a single–and vital–component of the audit committee’s responsibilities: the audit committee’s oversight of the external auditor. Yet while concentrated on one aspect of the audit committee’s work, the concept release seeks input on a myriad of questions–more than 200 by the CAQ’s estimation.
Fornelli noted the preliminary, exploratory nature of a concept release (as opposed to a thoroughly developed rule proposal), emphasizing that commenters need not address every question posed by the concept release. In this instance, she added, commenters can submit a letter “that is thematic, that talks about the big picture issues.”
The CAQ has prepared a resource on the SEC’s concept release, including policy context, the scope of the release, and information on the logistics of the comment process.
EY’s Howe: “Audit Quality Has Never Been Better”
Changes in the auditing profession over the past few decades have been “unbelievable,” said Stephen R. Howe, Jr., Americas Managing Partner and Managing Partner of the U.S. Firm at EY, in the August episode of “Profession in Focus.” Howe, a 32-year veteran of the profession and a member of the CAQ’s Governing Board, cited the transformative impact of technology, globalization, and regulation in particular.
In the face of this change, however, Howe described audit quality as being at an “all-time high.” He credited the profession’s keen focus on enhancing audit quality, which in turn has allowed firms to convey “the purpose of what we do, the excitement of this profession, the opportunities for young people today.”
In the interview, Howe also shared reflections on diversity and governance trends. Striving for diversity has been critical for EY itself, he said, as it “makes for better teams, better ideas, more innovative thinking.”
Public Company Auditing: A Path to a Dynamic, Purpose-Driven Career
What makes the public company auditing profession a solid and smart career choice? A new resource from the CAQ, aimed largely at accounting professors and others with influence over career decisions, sets forth the case succinctly on one page. “Auditing is rigorous, challenging, complex, and ever-changing,” says the document, which also cites the profession’s attributes of mobility, flexibility, continuous improvement, and a broader mission to build investor confidence.
CAQ Urges “Holistic” Approach to Enhancing Standards on Use of Specialists
Effectively amending the standards governing the auditor’s use of specialists will require a holistic approach, wrote the CAQ in a comment letter to the Public Company Accounting Oversight Board (PCAOB). The CAQ filed its letter in response to a PCAOB Staff Consultation Paper published in May 2015.
“Any enhancements to existing auditing standards and guidance should promote audit quality, be operational and adaptable to changes in the evolving capital markets, and continue to recognize that auditors will likely need to use the work of a specialist when audit matters require specialized knowledge and subject matter expertise in a field other than accounting or auditing,” the letter said.
CAQ Taps New Senior Director of Professional Practice
Catherine Nance has joined the CAQ as Senior Director of Professional Practice. In this capacity, Nance will play a pivotal role in leading the CAQ’s regulatory and public policy initiatives and activities.
Nance comes to the CAQ from the global law firm of Fragomen, Del Rey, Bernsen & Loewy, where she served as Director of Audit. From 1997 to 2013, Nance was in the audit practice at PwC, most recently as a Senior Manager in the firm’s Chief Auditor Network. In that role, she provided auditing advice and technical guidance on auditing standards, policies, and methodologies at the local engagement level, particularly related to areas of internal and external inspection findings.
“I am thrilled to welcome Catherine to the CAQ’s senior leadership team,” said Cindy Fornelli in a statement. “She brings deep expertise in public company auditing and a critical understanding of the various stakeholder constituencies that the CAQ aims to serve.”