CAQ Snapshot: December 2017
Friday, December 22, 2017
CAQ Tool Aims to Help Audit Committees with Expanded Auditor’s Report
The Center for Audit Quality (CAQ) has issued a new tool that flags key considerations and questions for audit committees as implementation of the Public Company Accounting Oversight Board (PCAOB)’s new auditor’s reporting model gets underway.
The Auditor’s Report: Considerations for Audit Committees explains changes to the auditor’s report and lists key questions on topics including auditor tenure, Critical Audit Matters (CAMs) and other new requirements. The new auditor’s reporting model is to be implemented with a phased approach, and the tool provides a timeline for implementation deadlines. Additionally, the tool presents a set of key questions that the National Association of Corporate Directors has gleaned from audit committee members about the new auditor’s report.
“The public company auditing profession has supported changes to the auditor’s reporting model as a means of providing meaningful information to market stakeholders in an increasingly complex and global business environment,” said CAQ Executive Director Cindy Fornelli in a statement. “This CAQ tool is part of the profession’s commitment to a smooth transition to the new model for preparers, auditors, audit committees, and investors.”
At AICPA Conference, Fornelli Urges Dialogue and Engages with SEC Leadership
Robust dialogue between market stakeholders, a strong focus on policies that work for investors, and innovation to respond to changes in ever-evolving markets: all three of these are vital to maintaining today’s strong levels of investor confidence, said the CAQ’s Fornelli in a December 4 keynote speech. Her remarks were given before the 2017 Conference on SEC and PCAOB Developments, hosted by the American Institute of CPAs (AICPA) in Washington, DC.
“US investors place extraordinary confidence in our capital markets, which are vibrant and sound,” said Fornelli. “We can never take these good things for granted.”
Immediately following her remarks, Fornelli sat down for a Q&A session with Securities and Exchange Commission (SEC) Chairman Jay Clayton and Chief Accountant Wesley Bricker. Their wide-ranging conversation covered topics such as the state of the capital markets, the critical role of public company auditors and audit committees, implementation of new accounting standards, and the regulation of Bitcoin.
“We have a disclosure-based regime,” said Clayton, “and the bedrock of that disclosure-based regime is audited financial statements.”
CAQ Responds to PCAOB Leadership Changes
On December 12, the SEC announced the appointment of William D. Duhnke III as the new PCAOB chairman as well as other incoming board members: J. Robert Brown, Kathleen M. Hamm, James G. Kaiser, and Duane M. DesParte. In a statement, the CAQ’s Cindy Fornelli congratulated Duhnke and the four other incoming board members, emphasizing that the PCAOB’s efforts to promote high-quality, independent audits of public companies are crucial to investor confidence and the vitality of our capital markets.
“Chairman Duhnke will lead a new PCAOB board made up of experts with diverse backgrounds and experience that will help in carrying out its important mission,” said Fornelli. “The CAQ looks forward to serving as a resource to Chairman Duhnke and the PCAOB as part of the public company auditing profession’s commitment to continuous improvement.” Fornelli also thanked outgoing Chairman James R. Doty and Board Members Steven B. Harris, Lewis H. Ferguson, and Jeanette M. Franzel for their service and strong commitment to enhancing audit quality.
New Materials Added to the CAQ’s Resource Page for Auditors of Brokers and Dealers
Reflecting its commitment to supporting the auditing profession in performing high quality audits of brokers and dealers, the CAQ in December added updates to its dedicated resource page, www.thecaq.org/brokerdealers.
Leveraging previously issued CAQ alerts that are applicable to the audits of brokers and dealers, these updates include a series of broker-dealer alerts on specific topical areas and a page of links to useful resources beyond those provided by the CAQ.
Now Available: Panel Video on The Board’s Role in Disclosure
What are board best practices in disclosure oversight? What information do investors desire and expect? Get expert perspective on these questions in this recently released video of an October 2017 panel discussion, “Telling Your Company’s Story: The Board’s Role in Disclosure,” hosted by the CAQ and the John L. Weinberg Center for Corporate Governance at the University of Delaware. Panelists, including the CAQ’s Cindy Fornelli, provided views on disclosure and engagement from the investor, issuer, auditor, director, and legal communities.
Profession in Focus: EY’s Goldhamer Provides Learning Insights
For those just starting their careers at public accounting firms, it’s critical both to pursue specific interests and to stay aware of the big picture, says Tal Goldhamer, EY Partner and Chief Learning Officer – Americas, in the latest episode of the CAQ’s “Profession in Focus” video series. Goldhamer also discusses the importance of practice, simulation—even sleep—in effective learning.
“Sometimes we spend a lot of time still trying to put a lot of information into people’s brains, which is counterproductive,” notes Goldhamer. “To get learning to stick, we need to put it in the form of practice and simulations—and put it in a way that gives good context for everyone.”
Join the CAQ at These Upcoming Events
AICPA Major Firms Group Meeting
The CAQ is pleased to join the AICPA for its January Major Firms Group Meeting.
January 3-5, 2018; Naples, Florida (Website)
KPMG Board Leadership Conference
We look forward to seeing our audit committee colleagues at KPMG’s Board Leadership Conference. On January 9, CAQ Executive Director Cindy Fornelli will speak on a panel, “Audit in Focus,” with KPMG’s Vice Chair of Audit, Frank Casal; KPMG Audit Partner Marc Macaulay; and Director Blythe McGarvie of LKQ Corporation, Sonoco Products, and Wawa.
January 8-10, 2018: San Diego, California (Website)
AAA Auditing Section Midyear Meeting
Join the CAQ at AAA’s Annual Midyear Meeting where Cindy Fornelli will moderate a panel discussion on the “Challenges Facing the Profession,” on January 12 at 10:15 a.m. Panelists include BDO’s National Managing Partner of Auditing, Phillip Austin; PCAOB Chief Auditor and Director of Professional Standards Marty Baumann; Deloitte & Touche LLP Partner Dan Sunderland; and EY’s Americas Private Equity Assurance Leader, Scott Zimmerman. Registration is open until December 27!
January 11-13, 2018; Portland, Oregon (Website)