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CAQ Snapshot: September 2018

Friday, September 28, 2018

CAQ Executive Director Cindy Fornelli Announces Retirement

After 12 years as the Center for Audit Quality’s (CAQ’s) first Executive Director, Cindy Fornelli announced she will step down from that role and retire in the spring of 2019.

In a statement issued by the CAQ, Fornelli expresses her thanks and gratitude for the “tremendous privilege” of working over the years with the CAQ Governing Board, representatives from audit firms, CAQ colleagues, policymakers, and market stakeholders. “Together, we have accomplished so much,” she says. Looking ahead, Fornelli pledges a smooth transition to “a new era of CAQ leadership” in the coming months.

Public Company Auditors Earn Solid Confidence Ratings from US Investors

Eighty-one percent of American investors say they have confidence that public company auditors are effective in their investor protection roles, according to the2018 Main Street Investor Survey. The annual survey from the Center for Audit Quality polls investors with at least $10,000 invested in the capital markets through retirement plans or direct holdings.

“The public company auditing profession works hard each day to build investor confidence, and we are pleased to see that a strong majority of investors view independent auditors as effective parts of the system of investor protection,” says the CAQ’s Cindy Fornelli.   

Fielded by Morning Consult in late August 2018, the survey found that confidence levels in US capital markets, public companies, and audited financials stood at 74 percent, 78 percent, and 75 percent, respectively.

The survey also queried investors about the underlying reasons for their confidence levels. Among investors who expressed confidence in US markets, the top reasons selected were the strength of the US economy, the performance of the stock market, confidence in the Trump administration, and belief in the free-market system. For those who expressed a lack of confidence, the most prevalent factors selected were lack of leadership in the Trump administration, fear of trade wars or uncertainty regarding free-trade agreements, and lack of leadership in the US Congress.

#AuditorProud Social Media Blitz Celebrates Careers in Auditing

On September 27, the CAQ and its members led 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 and others across the globe shared messages, photos, and stories about why they chose the auditing profession, what they enjoy about working in the field, and the critical role that auditors play in the capital markets.

This year, a key #AuditorProud theme was myth-busting: smashing misperceptions about auditing careers with true experiences and stories shared by auditors. At the Discover Audit website, you can find these stories and learn more about the CAQ’s efforts to attract the best and brightest to public company auditing.

Fornelli: “People Are the Foundation of the Auditing Profession”

The allure of emerging technology in auditing, writes Cindy Fornelli in this September 2018 LinkedIn Influencer post, “shouldn’t cause us to lose sight of the fact that the true foundation of the auditing profession is—and always will be—people.” The importance this foundation, Fornelli adds, is why the auditing profession works so hard to cultivate the next generation of auditors through initiatives like the #AuditorProud blitz and others.

Fornelli’s post was part of the CAQ’s monthlong thematic focus on “foundation” and how the auditing profession serves as a bedrock for investor confidence and the capital markets. The CAQ’s theme for October will be “disruption.” Follow along and join the conversation on social media using #BuildingaBedrock.

CAQ Welcomes New Senior Director of Human Capital and Administration

Liz Barentzen has joined the CAQ as its Senior Director of Human Capital and Administration. In that role, she oversees the CAQ’s day-to-day and long-term strategic operations, as well as its efforts to help the public company auditing profession attract and retain talent. 

With almost 20 years of experience in human capital, Barentzen comes to the CAQ from Sol Systems LLC, where she was Chief Culture Officer. Previously, she was the Director of Workforce Relations at the Overseas Private Investment Corporation. A member of the New York Bar, Barentzen holds a JD from Brooklyn Law School and a BA in psychology from New York University.

Now Available: Videos and More from the Tenth Annual CAQ Symposium

Materials from the Tenth Annual CAQ Symposium, held last month in Washington, DC, are now available onthe CAQ website. The event, which coincides each year with the Annual Meeting of the American Accounting Association (AAA), is a key part of the CAQ’s ongoing dialogue with the academic community about how research can inform audit practice.

Materials include videos from each panel discussion: Navigating Challenges of New Standards: Lessons for the Future and Evolving Needs for the Audit of 2023. Also available is a summary of the Symposium’s breakout discussions, as well as a video from the CAQ’s panel at the AAA Annual Meeting, The Auditor’s Reporting Model: What Will the Future Bring?

CAQ Comments on PCAOB Strategic Plan

In a September comment letter, the CAQ provides input on the Public Company Accounting Oversight Board’s (PCAOB)’s draft Strategic Plan 2018–2022. Expressing support for the strategic goals outlined in the plan, the CAQ focuses its comments on the Board’s goals to (1) drive improvement in the quality of audit services through a combination of prevention, detection, deterrence, and remediation; (2) anticipate and respond to the changing environment, including emerging technologies and related risks and opportunities; and (3) enhance transparency and accessibility through proactive stakeholder engagement.

Duncan and Kadous Appear on Profession in Focus

In September, the CAQ added two new episodes to its Profession in Focusseries. The first episode features Candy Duncan, who serves on the boards of Discover Financial Services, Teleflex, and FTD. Duncan, who chairs the audit committee at Teleflex, provides a director’s view of progress on the updated auditor’s report, cybersecurity as “full-board sport,” and the importance of mentorship in promoting gender diversity.

Appearing in the second episode is Kathryn Kadous, Schaefer Chaired Professor of Accounting and Director and Associate Dean of the PhD program at Emory University’s Goizueta Business School. In a conversation with the CAQ’s Margot Cella, Kadous discusses why today’s accounting students must build a foundation of critical thinking, a strong ability to identify the right tools for specific situations, and a love of learning that will endure long after graduation. “More than ever, [accounting students] are going to have to be able to build on the knowledge that they get in school,” she says.

Join the CAQ at These Upcoming Events  

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

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

On October 1, Fornelli will join Marc Panucci, Deputy Chief Accountant at the US Securities and Exchange Commission; 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 24–October 26; Boston, Massachusetts

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

Current Financial Reporting Issues (CFRI) Conference
November 13–14, 2017; New York, New York

Join Cindy Fornelli and our fellow financial executives at Financial Executives International’s 37th annual CFRI Conference. Fornelli will moderate a session with PCAOB Board Members Duane DesParte and James Kaiser for a November 12 panel discussion on “The PCAOB: Rethinking Strategy from Top Down.”