CAQ Snapshot: February 2020

Thursday, February 27, 2020

Commentary: Putting Financial Revisions and Restatements in Perspective

Over the past two decades, US financial restatements have trended steadily down. Yet the issue of revisions and restatements is not a simple one, writes CAQ Executive Director Julie Bell Lindsay in a February commentary published by Accounting Today. “In fact,” she says, “it comes with considerable complexities and nuance, especially when drawing a link between revisions or restatements and audit quality.”

Lindsay highlights several important points to remember about these widely watched indicators. For example, she observes revisions and restatements themselves can be a sign that the system is working: “Companies have incorporated a comprehensive approach to financial reporting, internal controls, and corporate governance, enabling them to more effectively hold themselves accountable to mistakes and be transparent in their reporting to investors, all under the watchful eyes of audit committees and independent auditors.”

Additionally, Lindsay notes that financial revisions and restatements are indicators of audit quality—but “they are far from the only ones.” As discussed at length in the CAQ’s Audit Quality Disclosure Framework, other key elements of audit quality include, among others, a firm’s leadership, culture, and governance; ethics and independence considerations; and engagement team management.

Preview a Powerful New Documentary on Audit Careers

Coming soon to a PBS station near you: Making it Balance, a documentary focused on the extraordinary possibilities of careers in auditing. Although the full documentary is set to air on June 4, a trailer is available for viewing now.

Filmed for the Roadtrip Nation public television series, Making It Balance captures the experiences of three young people—Sobia Bhatti, Da’Rell Bratton, and Leilani Wei—who crossed the country on a road trip to meet with a diverse group of professionals at all stages of their careers. Along the way, the three learned about the wide range of paths in auditing and accounting, heard firsthand from auditors about the profession’s drive to evolve and improve, and gained valuable perspective on charting their own career paths.

The trio of road-trippers spoke not only with people working at public accounting firms but also with those whose auditing experience has led them to extraordinary opportunities outside the profession. “The accounting and auditing profession really allowed me to do it all,” says one of their interview subjects, Cathy Engelbert, current Commissioner of the WNBA and former CEO of Deloitte US.

Learn more about the Making it Balance documentary—and find other resources related to auditing careers—on the CAQ’s Discover Audit website.

Now Available: Video from Talent Discussion at AAA Midyear

Talent was on the agenda at the recent MidYear Meeting of the American Accounting Association (AAA) Auditing Section. CAQ Executive Director Julie Bell Lindsay moderated “Leveraging New and Old Media to Promote Degrees in Accounting,” a panel discussion that generated expert perspectives on how business schools can spread the message about the vast opportunities that await accounting majors and the purpose-driven nature of a career in auditing.

The CAQ has posted the full video of the panel online. Other participants were Cynthia Boon of Live Nation; Da’Rell Bratton, a student at Prairie View A&M University (and a featured road-tripper in Making It Balance); Christine Earley of Providence College; and Ellen Glazerman of EY.

Learn More About Blockchain’s Anti-Fraud Potential  
Technology is helping transform the public company auditing profession, and blockchain is one driver of that evolution. What are the implications of this technology for deterring and detecting financial reporting fraud? Drill down on this question and others in a new article on blockchain from the Anti-Fraud Collaboration. Authored by Lucy Wang, CFE, CAQ Senior Technical Manager of Anti-Fraud, the article is the second in a collaborative series on emerging technology and fraud.
“The technology is anti-fraud by design,” writes Wang, noting blockchain’s ability to mitigate fraud risk by strengthening integrity, traceability, transparency, and security. However, she also points to potential risks that come with this emerging technology, such as collusion amongst participants on a network.
Check Out These Upcoming Events

Practising Law Institute: Corporate Governance—A Master Class 2020

March 6, 2020; New York, NY
Catherine Ide, CAQ Senior Managing Director of Professional Practice and Member Services, will appear at this one-day event, which helps bring directors and company executives up to speed on the latest governance trends.

REITwise: 2020 Law, Accounting & Finance Conference

April 1–3, 2020; Washington, DC
At this conference, hosted by the National Association of Real Estate Investment Trusts, Catherine Ide will join a panel on key regulatory developments at the Public Company Accounting Oversight Board and the Securities and Exchange Commission.