May 25th 2011
By Adrienne Gonzalez
Kicking off the annual Spring AICPA Council meeting in Washington, D.C., Center for Audit Quality Executive Director Cindy Fornelli gave an update on Center for Audit Quality activities Sunday to a packed house, taking place just a block away from CAQ headquarters.
Fornelli updated attendees on improvements in audit quality, the CAQ’s anti-fraud initiatives and partnerships with Financial Executives International as well as elaborated on comments made by the CAQ at the April 6th Senate hearing on the role of the accounting profession in preventing another financial crisis.
The CAQ - through its Auditor's Report Working Group - will continue to provide input to PCAOB staff to develop an auditor's reporting model that is responsive to the needs of investors but also respects the role and responsibilities of those involved in the financial reporting framework. The CAQ supports the PCAOB's consideration of changes to audit reports and believes there are a number of areas where these reports can be improved.
Fornelli also touted the CAQ’s In-Depth Guide to Public Company Auditing, which describes how a public company audit firm decides to accept a new audit engagement, how it assesses the risk that the financial statements contain material misstatements as part of determining the audit’s scope, and then how the auditors perform and report their findings, in plain English. Former FASB Chairman Denny Beresford feels the Guide is appropriate both for a business person interested in learning about public company audits and accounting students with the same interest.
The CAQ is also looking at additional outreach opportunities to educate on the role and value of public company audits and the auditing profession as a whole. Already tweeting at @theCAQ, additional opportunities may exist in digital or social media, namely videos that are both instructive and entertaining. The CAQ considers this an ongoing initiative and is working to deliver more easily digestible information to investors and the public on the audit process and the value that independent auditors bring to the financial reporting processes of public companies.
Fornelli discussed changes to the CAQ’s Web site, including a new “For Investors” area that features a weekly “Did You Know” fact about the audit process.
Lastly, the CAQ remains committed to the field of auditing research. Fornelli said the CAQ received 48 submissions from around the world for this year’s research RFP, 38 of which were submitted by project teams that include either PhD students or tenure-track professors. Of the recipients – to be announced in the next few days – three were participants in the Accounting Doctoral Scholars Program.