Mary Schapiro Joins the CAQ Governing Board
On July 9, the Center for Audit Quality (CAQ) announced that the Honorable Mary L. Schapiro, the 29th chairman of the U.S. Securities and Exchange Commission (SEC), joined the CAQ's Governing Board. Schapiro now serves as one of three independent Governing Board members who come from outside the public company auditing profession.
During Ms. Schapiro's four years as SEC chairman, from January 2009 to December 2012, the SEC pursued one of the busiest rulemaking agendas in its history, while bringing a record number of enforcement actions. Additionally, the agency executed a comprehensive restructuring program to improve protections for investors.
"Mary's extraordinary record of leadership is matched by her demonstrated commitment to investor protection and sound financial policy," said CAQ Executive Director Cindy Fornelli in a statement. "The public company auditing profession plays a critical role in protecting investors in our capital markets, and the CAQ plays a key role in focusing on continuous improvements to audit quality,” added Schapiro. "I look forward to working alongside my fellow Governing Board members to help the CAQ carry out its important mission."
Anti-Fraud Collaboration Releases Third Case Study
The Anti-Fraud Collaboration continues to promote diligence in financial fraud deterrence and detection with the July release of another installment in its successful series of case studies.
The Kendallville Bank Case Study explores potential material fraud at a fictitious regional bank. With a plot revolving around the questionable accounting decisions of a star executive, this hypothetical scenario is designed to foster a greater understanding of the importance to exercise skepticism in the financial reporting process at publicly traded companies.
Formed in 2010, the Anti-Fraud Collaboration consists of the Center for Audit Quality, Financial Executives International, the National Association of Corporate Directors, and The Institute of Internal Auditors. The Collaboration promotes the deterrence and detection of financial reporting fraud through the development of educational opportunities, thought leadership, awareness programs, and related resources.
Kendallville Bank is the Collaboration's third case study. The first, Hollate Manufacturing, focused on understanding the conditions that can generate and perpetuate fraud and misrepresentation in financial reporting. The second, Carolina Wilderness Outfitters, is intended to facilitate a discussion about how to conduct an internal investigation when fraud is suspected in an organization.
To accompany the release of the Kendallville Bank Case Study, the Anti-Fraud Collaboration has also created a short video that introduces the fact pattern and brings it to life in cinematic fashion. The video can be found on the Center for Audit Quality's YouTube channel.
CAQ Governing Board Members Hooper and Paine Featured on "Profession in Focus"
In July, the CAQ added to its "Profession in Focus" video series with two episodes featuring members of the CAQ Governing Board. In the first, Lynn Paine, John G. McLean Professor of Business Administration and Senior Associate Dean at the Harvard Business School, discussed the importance of robust and independent academic research to the public company auditing profession. "Having academic research that continually revitalizes [the profession's] body of knowledge is absolutely crucial," Paine observed.
In the following episode, Michele J. Hooper, President and CEO, The Directors’ Council, and co-chair of the Anti-Fraud Collaboration’s Steering Committee, noted the benefits of the Collaboration's case studies. “These case studies are a useful addition to the arsenal of fraud tools that we have brought to the marketplace,” she said.
Anti-Fraud Webcast Draws Thousands of Viewers
On July 16, more than 3,600 people viewed a July 16 webcast from the Anti-Fraud Collaboration. Featuring a panel of experts discussing lessons learned from recent SEC enforcement proceedings, the webcast provided concrete, action-oriented steps that governance professionals can take to deter and detect fraud. An archived version of the webcast can be found on the Anti-Fraud Collaboration website, CAQ's YouTube channel, and the Webcasts page of the CAQ website.