May 3, 2024

Public Policy and Technical Alert | April 2024

Public Policy & Technical Alert

As part of the Center for Audit Quality’s (CAQ) ongoing effort to keep members and stakeholders informed on significant public policy and accounting matters, we are pleased to offer the Public Policy and Technical Alert (PPTA). Each month, the PPTA highlights and examines the regulatory, standard-setting, legislative, and broader financial reporting developments impacting the public company audit profession. Please note that the PPTA is intended as general information and should not be relied upon as being definitive or all-inclusive. The CAQ encourages member firms to refer to the rules, standards, guidance, and other resources in their entirety at the hyperlinks provided below. All entities should carefully evaluate which requirements apply to their respective organizations.

In This Issue


PCAOB Issues Proposals on Standardizing Disclosure of Firm and Engagement Metrics and Modernizing the PCAOB’s Reporting Framework

The PCAOB issued for public comment a proposal regarding public reporting of standardized firm and engagement metrics and a separate proposal regarding the PCAOB framework for collecting information from audit firms. The firm and engagement metrics proposal would, if adopted, require PCAOB-registered public accounting firms that audit one or more issuers that qualify as an accelerated filer or large accelerated filer to publicly report specified metrics relating to such audits and their audit practice. The firm reporting proposal would, if adopted, amend the PCAOB’s annual and special reporting requirements to facilitate the disclosure of more complete, standardized, and timely information by registered public accounting firms. The deadline for public comment on both proposals is June 7, 2024.

The PCAOB Has Released Its 2023 Annual Report

The PCAOB released its 2023 Annual Report, which summarizes its operations and financial results from last year.

Christine Gunia Named Director of the PCAOB’s Division of Registration and Inspections

The PCAOB announced the appointment of Christine Gunia as Director of the PCAOB’s Division of Registration and Inspections. Prior to her current appointment, Gunia served as DRI’s Acting Director. She has been with the PCAOB since 2004. As DRI’s Director, Gunia oversees audit firm registrations and inspection of all domestic and foreign accounting firms that audit issuers whose securities trade in the U.S., as well as audits of SEC-registered broker-dealers.

PCAOB Chair Williams to Kick Off Series of In-Person Forums to Provide Information, Resources to Small Firms

The PCAOB announced it will hold a series of five in-person forums on auditing in the small business environment and on auditing broker-dealers throughout 2024. Each of the five PCAOB Board Members will host a forum in a different city across the country, starting with Chair Erica Y. Williams in Chicago on May 22, 2024. Participants at this year’s forums will receive a refresher on various auditing requirements as well as learn about new requirements that will become applicable in the near future. In addition to remarks from PCAOB Board Members, the agenda includes the following:

  • Presentations by PCAOB staff from the Office of the Chief Auditor, the Division of Registration and Inspections, and the Division of Enforcement and Investigations
  • Illustrative examples related to revenue, critical audit matters, and fraud/journal entries, among other topics
  • Presentations by staff of the Financial Industry Regulatory Authority and the Securities and Exchange Commission

PCAOB April 24 Virtual Meeting of Its Investor Advisory Group

The PCAOB held a virtual meeting of its Investor Advisory Group on Wednesday, April 24, 2024. The meeting agenda included a PCAOB Standard-Setting update, a PCAOB Division of Registration and Inspections update, an IAG presentation to the Board on Artificial Intelligence, and an IAG request for Critical Audit Matters.

Investor Advisory: PCAOB Investor Advisory Group Requests Public Submit Examples of Critical or Key Audit Matters

The PCAOB Office of the Investor Advocate posted an alert for investors about the opportunity to provide the PCAOB Investor Advisory Group with examples of critical audit matters or key audit matters for analysis. The PCAOB Investor Advisory Group explained during its April 24, 2024, meeting that it is seeking nominations from the general public, including from public company issuers, auditors, financial analysts, and investors for the most decision useful critical audit matter or key audit matter contained in public company audit reports included in the 2023 Form 10-Ks and Form 20-Fs. The IAG has requested that the public provide submissions by June 30, 2024.

A New PCAOB Staff Report Shares Observations on How Root Cause Analysis Can Drive Audit Quality

The PCAOB posted a new staff report, Spotlight: Root Cause Analysis – An Effective Practice To Drive Audit Quality. The publication provides an overview of the topic, general considerations regarding root cause analysis, other observations about root cause analysis from PCAOB inspections, and key questions for audit firms to consider.

A New PCAOB Staff Report Shares Observations That Can Help Auditors Properly Test Information Produced by Companies and External Sources

The PCAOB posted a staff report on inspection observations related to auditor use of data and reports. The Spotlight Report provides an overview of the topic, common areas of inspection deficiencies related to data and reports, reminders for auditors, and good practices.



FASB Announces Members of Reconstituted Emerging Issues Task Force

The FASB announced members of its newly reconstituted Emerging Issues Task Force. The mission of the EITF is to assist the FASB in improving financial reporting through the timely identification and development of proposed solutions to address narrowly scoped financial accounting issues within the framework of the FASB Accounting Standards Codification. As part of its new operating procedures, the EITF will have the ability to manage its own agenda and accept potential agenda requests directly from external stakeholders. By majority vote of its members, the EITF will provide recommendations to the FASB to:

  • Add projects to the FASB’s technical agenda
  • Offer recommended solutions for the Board’s consideration

The FASB plans to host an EITF meeting in June.



Innovative Program to Ease Attainment of CPA Education Requirement Gets Off to Quick Start

The AICPA announced that a pilot program to help accounting graduates earn the required academic credits for CPA licensure is off to a quick start and has earned positive reviews in limited feedback so far from students and the accounting firms that employ them. Thirty-eight students are currently enrolled in the Experience, Learn & Earn program, developed by the AICPA and the National Association of State Boards of Accountancy as a flexible and affordable way for accounting graduates to complete the CPA licensure requirement of an extra 30 academic credits beyond a typical bachelor’s program. Online classes, offered through Tulane University’s School of Professional Advancement, began in January. Accounting graduates are recruited into the program by accounting firms (businesses and government entities can also sponsor candidates), which agree to employ them. More than 250 firms of all sizes have expressed interest in the program, which is now open for enrollments for the summer and fall sessions.



New IAASB Video Series Explores Proposed Changes to Fraud Standard

The International Auditing and Assurance Standards Board announced a new four-part video series as it reaches the midpoint of its public consultation on proposed amendments to its fraud standard. The series will help stakeholders understand the proposed changes that strengthen auditors’ responsibilities related to fraud, and the rationale behind them. Explore the Understanding Proposed Changes to the Fraud Auditing Standard Video Series:

  • Overview of Key Changes
  • Spotlight on Auditor’s Responsibilities
  • Auditor’s Response to Fraud or Suspected Fraud
  • Enhanced Transparency in the Auditor’s Report

The proposed changes to ISA 240 significantly strengthen auditors’ responsibilities relating to fraud. Stakeholders are invited to share their insights by June 5, 2024.

New IFRS Accounting Standard Will Aid Investor Analysis of Companies’ Financial Performance

The IFRS announced it completed its work to improve the usefulness of information presented and disclosed in financial statements. The new Standard, IFRS 18 Presentation and Disclosure in Financial Statements, will give investors more transparent and comparable information about companies’ financial performance, thereby enabling better investment decisions. It will affect all companies using IFRS Accounting Standards. IFRS 18 introduces three sets of new requirements to improve companies’ reporting of financial performance and give investors a better basis for analyzing and comparing companies:

  • Improved comparability in the statement of profit or loss (income statement)
  • Enhanced transparency of management-defined performance measures
  • More useful grouping of information in the financial statements

IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, but companies can apply it earlier. IFRS 18 replaces IAS 1 Presentation of Financial Statements.

IAASB Announces New Strategy and Work Plan to Advance Global Audit and Assurance Standards

The IAASB published its approved strategy and work plan aimed at enhancing consistency and quality of audit and assurance standards worldwide. Elevating Trust in Audit and Assurance: IAASB’s Strategy and Work Plan for 2024-2027 reflects the crucial role of audit and assurance in fostering trust in the world’s economies. Key highlights of the Strategy include:

  • Completing priority audit and assurance projects, with emphasis on fraud, going concern, and sustainability assurance.
  • Commencing new initiatives and projects, including focusing on supporting the adoption and implementation on its overarching standard for sustainability assurance engagements, establishing an IAASB Technology Position, and conducting post-implementation reviews, as well as standard setting on, among other topics, audit evidence and risk response, materiality, and reviews of interim financial information.
  • Collaborating with official stakeholders across the external reporting ecosystem, including the International Ethics Standards Board for Accountants, regulators, and standard setters, in addition to other stakeholders.
  • Engaging with regulatory and standard-setting partners to strengthen trust in markets globally.
  • Further implementing the Monitoring Group’s recommendations to enhance independence and accountability in standard setting.

IASB Concludes Project on Business Combinations Under Common Control

The IASB published a project summary for its project on Business Combinations under Common Control. IFRS 3 Business Combinations sets out reporting requirements for acquisitions—referred to as business combinations in IFRS Accounting Standards. However, that Standard does not specify how to report transactions that involve transfers of businesses between companies under common control (for example, companies in the same group). The project summary explains the reasons behind the IASB’s decision in November 2023 not to develop requirements for reporting BCUCCs.

IFIAR 2023 Annual Report

The IFIAR released its 2023 Annual Report.

IASB Launches Comprehensive Review of Accounting for Intangibles

The IASB announced it is commencing its comprehensive review of accounting requirements for intangibles. The project will assess whether the requirements of IAS 38 Intangible Assets remain relevant and continue to fairly reflect current business models or whether the IASB should improve the requirements. The initial research and planning phase aims to define the scope of issues to be explored in the project and explore the best approach to plan and organize the work. Over the next few months, the IASB will be consulting with its advisory bodies and other stakeholders to help inform the project plan. This will be discussed at a future public meeting.

ISSB Publishes Its Digital Sustainability Taxonomy, Helping Investors Analyze Sustainability Disclosures Efficiently

The IFRS announced the International Sustainability Standards Board published the IFRS Sustainability Disclosure Taxonomy, fulfilling its promise to enable investors and other capital providers to analyze sustainability-related financial disclosures efficiently. The Taxonomy reflects IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information, IFRS S2 Climate-related Disclosures and their accompanying guidance. Designed to be consistent with the IFRS Accounting Taxonomy so that companies can provide a holistic digital financial reporting package to investors, the ISSB Taxonomy can also be used with other digital taxonomies. In May, the IFRS Foundation will publish a webcast that explains the role of the ISSB Taxonomy and its benefits.



KPMG U.S. Chair and CEO Paul Knopp to Helm CAQ’s Governing Board

The CAQ announced Paul Knopp, KPMG U.S. Chair and CEO, has been elected Chair of the CAQ’s Governing Board, effective April 1, 2024. “The financial reporting landscape is constantly evolving, creating new challenges and opportunities for the public company audit profession,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “With his extensive experience serving large, multinational clients as an audit partner and his leadership and long-standing dedication to the profession as the Chair and CEO at KPMG, Paul will be essential to the CAQ as we fulfill our mission of supporting high-quality financial reporting, convening capital market stakeholders to advance discussions on audit quality issues and championing policies and standards that bolster and support audits.” Knopp succeeds Tim Ryan, US Senior Partner at PwC.

Podcast: Capital Markets Pulse, Episode 5

The CAQ posted Episode 5 of its Capital Markets Pulse Podcast. Hosted by Julie Bell Lindsay, CEO of the CAQ, Capital Markets Pulse dives into the latest key matters related to the capital markets, featuring experts from across the corporate reporting world.

Auditing in the Age of Generative AI

The CAQ posted a PDF for a publication, Auditing in the Age of Generative AI. Collective interest in and awareness of generative AI has grown exponentially since the public release of several GenAI chatbots powered by large language models beginning in November 2022. A recent CAQ survey found that one in three audit partners see companies in their primary industry sector deploying or planning to deploy AI in their financial reporting process. This number will likely continue to grow as companies explore the ways in which AI, including GenAI, can streamline or enhance accounting and financial reporting operations and processes. Download the publication to further explore:

  • Overview of GenAI technology
  • Regulatory environment
  • Audit considerations for companies deploying GenAI
  • Example use cases

Institutional Investor Survey: Research Findings, Q2 Survey

The CAQ announced the release of research to further understand capital market stakeholder information needs. The CAQ partnered with KRC Research to conduct independent quantitative and qualitative field work involving a diverse group of investor community stakeholders. This second survey in the CAQ’s 2024 series focuses on two matters related to climate-related disclosures:

  • First, the CAQ wanted to understand the role of, and confidence in, climate-related disclosures when it comes to investment decision-making.
  • Second, the CAQ wanted to gain early insights into investor reactions to the SEC’s final rule on climate-related disclosures.


The Center for Audit Quality is a nonpartisan public policy organization serving as the voice of U.S. public company auditors and matters related to audits of public companies. The CAQ promotes high quality performance by U.S. public company auditors; convenes capital market stakeholders to advance the discussion of critical issues affecting audit quality, U.S. public company reporting, and investor trust in the capital markets; and using independent research and analyses, champions policies and standards that bolster and support the effectiveness and responsiveness of U.S. public company auditors and audits to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit

The CAQ Public Policy and Technical Alert (PPTA) is intended as general information and should not be relied upon as being definitive or all-inclusive. As with all other CAQ resources, this is not authoritative and readers are urged to refer to relevant rules and standards. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The CAQ makes no representations, warranties, or guarantees about, and assumes no responsibility for, the content or application of the material contained herein and expressly disclaims all liability for any damages arising out of the use of, reference to, or reliance on such material. This publication does not represent an official position of the CAQ, its board, or its members.

Questions and comments about the Public Policy & Technical Alert can be addressed to Donnie Heinerichs, Manager, ESG Initiatives (