CAQ Snapshot: August 2018

Thursday, August 23, 2018

Tenth Annual CAQ Symposium Explores New Standards, Audit of the Future, and More


Wayne Berson, CAQ Governing Board member and BDO USA LLP Chief Executive Officer, delivers opening remarks at the Annual CAQ Symposium

Top practitioners from the public company auditing profession gathered with leading academics at the Tenth Annual CAQ Symposium, held this year on August 5 in Washington, DC. The event, which coincides each year 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.

As in the past, this year’s Symposium included panel discussions on critical issues confronting the profession, including navigating the challenges of new standards, and the evolving needs for the audit of the future. Stay tuned for video and other highlights from the 2018 Symposium, which will soon be made available on the CAQ’s website and YouTube channel.

Fornelli: “Tapping into the Power of Dialogue”

What makes dialogue effective and fruitful? In this August 2018 LinkedIn Influencer post, CAQ Executive Director Cindy Fornelli shares several dialogue-related observations drawn from the success of the Annual CAQ Symposium, namely the importance of consistency, preparation, format, and follow-up. “Spontaneous conversation can feel magical, but good dialogue in many cases doesn’t require magic,” she writes. “It requires work.”

Fornelli’s post was part of the CAQ’s monthlong focus on “dialogue,” a crucial part of the CAQ’s convening mission and the public company auditing profession’s efforts to build a bedrock of investor confidence. The CAQ’s theme for September will be “foundation.” Follow along and join the conversation on social media using #BuildingaBedrock.

CAQ Provides Input on Professional Skepticism

In an August 2018 comment letter, the CAQ provided input on a Consultation Paper, “Professional Skepticism – Meeting Public Expectations,” from the International Ethics Standards Board for Accountants (IESBA). “The importance of professional skepticism cannot be understated,” says the letter, which offered IESBA four high-level recommendations related to professional skepticism: (1) create a better understanding of behavioral characteristics; (2) seek clarity and address ambiguity; (3) use collaboration to promote action; and (4) address the expectation gap.

New CAQ Alerts on Audits of Broker and Dealers

As part of its focus on audits of brokers and dealers, the CAQ has issued Alert 2018-04, Broker’s and Dealer’s Use of a Service Organization. The alert includes a decision tree and associated information designed to assist auditors in developing their audit approach on audit and attestation engagements of a broker or dealer that uses a service organization. 

“There is no one-size-fits-all approach to auditing a broker’s or dealer’s use of a service organization,” says the alert, which notes that the audit approach should be based on “understanding of the broker’s or dealer’s transactions, related risks, the relevant controls at the broker or dealer, and the controls performed at the service organization that are part of the broker’s or dealer’s information system.”

Separately, the CAQ issued an alert highlighting the issuance by the Public Company Accounting Oversight Board (PCAOB) of its Annual Report on the Interim Inspection Program Related to Audits of Brokers and Dealers. The PCAOB report identifies areas where inspections revealed audit and attestation deficiencies. It also notes that there were fewer independence violations identified in 2017 than in previous years.

Register Now: Free Webcast on Critical Audit Matters

What are critical audit matters (CAMs), and why are they such an important change to the auditor’s reporting model? How will CAMs impact communication among audit committees, management, and auditors—and what you can do now to prepare? These topics and others will be on the agenda during this free one-hour webcast, taking place on September 25 at 1:00 p.m. EDT. Webcast speakers include Brian Croteau, Audit Partner at PwC; PCAOB Board Member Duane DesParte; Candy Duncan, Independent Director at Discover Financial Services Inc., Teleflex Inc., and FTD Companies Inc.; and the CAQ’s Cindy Fornelli. Learn more and register for the webcast here.

Daylor and Babiak Appear on Profession in Focus

The CAQ in August added two new episodes to its Profession in Focusseries. The first episode features Jackie Daylor, National Managing Partner – Audit Quality & Professional Practice at KPMG in the US. In conversation with the CAQ Managing Director Catherine Ide, Daylor discusses the updated auditor’s report, CAMs, and the keys to success for audit committees and others as they contend with a new approach to auditor reporting.

Appearing in the second episode is Jan Babiak, who serves on the boards of Walgreens Boots Alliance Inc., Bank of Montreal, and Euromoney Institutional Investors. Speaking with CAQ Managing Director Erin Dwyer, Babiak offers insights on the benefits of enhancing audit committee disclosure, the new auditor’s reporting model, audit committee “scope creep,” and how to think about board diversity. “I don’t think diversity is just about gender,” Babiak opines on the latter topic. “You’ve got to look at diversity in terms of that range of experiences and background.”

#AuditorProud Blitz Ahead!

Mark your calendars: From dawn to dusk on September 27, the CAQ and its members will lead a fourth annual social media “blitz” to celebrate and showcase the value of auditors to the economy and the benefits of an auditing career. Using #AuditorProud, auditors, academics, and others will share messages, photos, and stories about why they chose the auditing profession, what they enjoy about working in the field, and what a career in auditing can offer. To get a sense of #AuditorProud day, watch this highlight reel from a previous blitz. 

For 2018, a key #AuditorProud theme will be myth-busting: smashing misperceptions about auditing careers with the true experiences and stories of auditors across the globe. Auditors and non-auditors alike can support this effort by participating in the blitz and sharing #AuditorProud posts with friends and followers. Find tips, sample language, and more resources on the Discover Audit website, and feel free to contact the Discover Audit team directly with questions. Finally, be sure to follow Discover Audit on TwitterInstagram, and Facebook.

Join the CAQ at These Upcoming Events

The Job of the Corporate Director – Perspectives of Auditors, Regulators, and Accounting Organizations
September 6; Washington, DC

Cindy Fornelli will participate in the Conference Board Governance Center’s roundtable exploring “The Job of the Corporate Director – Perspectives of Auditors, Regulators, and Accounting Organizations.” The roundtable is part of a yearlong examination of the range of stakeholder expectations for public company directors.

AICPA & CIMA SEC Conference 2018
September 13–14; Hong Kong

We are delighted to join US and Asian accounting leaders, regulators, standard setters, and issuers for discussions related to the foremost issues in accounting and US Securities and Exchange Commission (SEC) compliance and reporting. On September 13, Cindy Fornelli will moderate a panel on SEC activities with Wes Bricker, Chief Accountant, SEC; Craig Olinger, Deputy Chief Accountant, Division of Corporate Finance, SEC; and Melissa Hodgman, Associate Director, Enforcement Division, SEC. Friends of the CAQ can receive 30 percent off the registration fee by registering via this link.

Corporate Board Member’s Building Better Boards Committee Series
September 20–21, Chicago, Illinois

On September 20, Erin Dwyer, CAQ’s Managing Director of Stakeholder Engagement, will moderate the session “Board Accountability 2.0: Investors’ Role in Driving the Evolution of Today’s Boardroom” with panelists John Hoeppner, Head of US Stewardship at Legal & General Investment Management; Christine O’Brien, Head of Investment Stewardship at Elliott Management Corp; Maureen O’Brien, Vice President & Director of Corporate Governing at Segal Marco Advisors; and Catherine Winner, Head of Stewardship at Goldman Sachs Asset Management. 

Catherine Ide, CAQ Managing Director of Professional Practice and Member Services, will present to the Audit Committee Forum on September 21 on “Five Key Financial Reporting Oversight Considerations for 2019.” 

NACD Global Board Leaders’ Summit 
September 29–October 2; Washington, DC

We look forward to seeing our governance colleagues at the 2018 Global Board Leaders’ Summit, hosted by the National Association of Corporate Directors (NACD). On September 30, Cindy Fornelli will moderate a session—“The Audit Committee’s Role in Corporate Culture”—with KPMG Partner Tracey Keele and Blythe McGarvie, Director at LKQ Corp., Sonoco Products Inc., Apple Hospitality REIT, and Wawa Inc.

On October 1, Fornelli will join Marc Panucci, SEC Deputy Chief Accountant; Leslie Seidman, Independent Director at GE and Moody’s Corporation; Matthew Becker, Chair and Managing Partner, BDO USA; and Humberto Alfonso, Audit Committee Chair of Eastman Chemical Company, for an Ask the Experts breakfast on finance and tax issues.

Fall Engagement Summit
October 3; New York, New York

The CAQ is pleased to sponsor and participate in the Fall Engagement Summit on Wednesday, October 3. We look forward to this interactive event with investors, leaders in proxy voting, and issuers.  

Council of Institutional Investors Fall Conference 
October 4–6; Boston, Massachusetts

The CAQ is pleased to continue its partnership with the Council of Institutional Investors at its 2018 Fall Conference.