CAQ Snapshot: December 2015
Tuesday, December 22, 2015
#AuditorProud Social Media Blitz Highlights Careers in Auditing
On December 10, 2015, the CAQ and its members led a 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 other individuals and organizations shared thousands of messages, pictures, and videos about why they chose auditing, what they enjoy about working in the profession, and what a career in auditing can offer. Pushed out to (and re-shared by) blitz participants’ followers on social networks, these messages reached a potential audience of nearly 26 million people across the globe.
“I am auditor proud,” said Deloitte CEO and CAQ Governing Board Chairman Catherine M. Engelbert in a statement released on the day of the blitz. “By sharing our stories on social media today, we will inform students and young professionals about what it truly means to be an auditor and the many exciting and unique opportunities a career in the accounting and auditing profession holds.”
“Attracting the best and brightest to the auditing profession benefits all with an interest in audit quality and high-functioning capital markets,” added CAQ Executive Director Cindy Fornelli.
At the CAQ’s multimedia release page, you can find #AuditorProud infographics, videos, tweets, and more.
CAQ Offers Principles-Based Framework on Auditing Fair Value Measurements
In a December letter to the Public Company Accounting Oversight Board (PCAOB), the CAQ issued Auditing Accounting Estimates and Fair Value Measurements: A Framework. The Framework expands on the views expressed in previous CAQ comment letters on standard-setting activities related to auditing accounting estimates, including fair value measurements, as well as the use of the work of specialists. The PCAOB has continued its work on the matters ahead of a proposal that is expected in 2016.
“The Framework is principles-based,” said the CAQ’s Fornelli in a letter accompanying the document. “We believe this is critical in order to be operational under the current construct of the capital markets and sensitive to the availability of data and information from specialists, pricing services, and other relevant market participants.”
Within the Framework, the CAQ offers suggestions for auditing accounting estimates that build upon the overarching principles described in its previous comment letters. Those principles state, for example, that any enhancements to existing auditing standards should recognize the relationship between the auditor’s risk assessment and the audit procedures designed to sufficiently and appropriately respond to that risk.
“Profession in Focus” Features Leonardson, Joy, and Moritz
Profession in Focus closed out 2015 with a trio of video interviews with top executives from across the public company auditing profession. In his interview, EY Partner Michael Leonardson focused on opportunities, challenges, and career implications of the growing use of data analytics in the auditing. “We’re using analytics tools in every facet of risk assessment,” he observed.
Episode 13 of Profession in Focus featured Jean M. Joy, CPA, Director of Professional Practice and Director of Financial Institutions Group at Wolf & Company P.C. A policy expert, Joy shared insights on the policy environment for mid-sized firms in the public company auditing profession.
For his part, Robert E. Moritz, Chairman and Senior Partner at PwC LLP and CAQ Governing Board Member, offered his views on cybersecurity, in particular on the potential role for external auditors in this area. “[Independent auditors] have a history of understanding controls, policies, and procedures to mitigate risks,” he said, adding: “We have the credibility to come in with the professional standards to provide some form of attestation.”
Commentary: Key Issues for Auditors in 2016
Of the many issues tracked by the CAQ, talent, cybersecurity, and disclosure are especially prominent, writes Cindy Fornelli in a December LinkedIn Influencer column. In the post, Fornelli discusses these topics and why each stands out in particular as the CAQ heads into 2016.
”Talent is arguably the most important issue for the public company auditing profession today,” she writes, “Firms of all sizes must focus intently on how to attract talent with expertise in data analysis, computer science, statistics, and other areas of expertise that are already changing the face of the profession and that will continue to do so.”
Fornelli also urges an intense focus on cybersecurity, suggesting that stakeholders across the financial reporting supply chain must work proactively “to find solutions and achieve a solid understanding of roles and responsibilities in this complex and rapidly evolving area.”
On disclosure, Fornelli cites high-profile, ongoing initiatives, such as the PCAOB’s concept release on audit quality indicators and the U.S. Securities and Exchange Commission’s concept releaseon audit committee disclosure. “We must remember that disclosure is not a one-size-fits all issue,” she says. “It has the most value when companies share tailored, meaningful information on their business sector, markets, risks, or strategy.”
In AICPA Speech, Fornelli Describes Profession’s “Focus on the Future”
Optimistic, proactive, engaged, responsive, and appreciative: These are all key aspects of how the public company auditing profession and the CAQ approach the future, said Cindy Fornelli in a December 9 speech. Fornelli made her remarks before the AICPA’s 2015 Conference on SEC and PCAOB Developments, held in Washington, DC.
“We are not dragged toward the future,” she said. “Rather, we step up to meet it, in the policy arena and elsewhere.”
Fornelli then briefed the audience on various and ongoing CAQ initiatives that embody the profession’s future focus, including development of a pilot-tested approach to audit quality indicators, the fight against financial reporting fraud, engagement with academics, and efforts to attract talent to the auditing profession.