CAQ's New Report on the Evolving Role of the Public Company Auditor

On May 2, 2012, the Center for Audit Quality (CAQ) has released a report summarizing its recent workshop on the evolving role of the public company auditor.
 
More than thirty workshop participants gathered in New York on March 12 to consider how the public company auditor's role might change to meet the needs of investors. Over half of the workshop participants were investors and buy-side analysts; the remaining participants were a mix of audit committee members, preparers, auditors, and others.
 
The workshop was built on discussions in a series of CAQ roundtables held with a range of stakeholders over the course of 2011 that began a dialogue about the evolving role of the public company. Workshop participants explored key questions that had been flagged at the roundtables, including the benefits of auditor involvement with financial information disclosed by management outside of the audited financial statements; specifically, Management Discussion and Analysis (MD&A), earnings releases, and key performance indicators (KPI).
 
Workshop observations included:
  • Non-GAAP disclosures are important to investors' decision-making processes, although audited financial statements provide a baseline.
  • More consistency and comparability is warranted in the use of KPI in MD&A and earnings releases.
  • Investors want to hear directly from management; auditor involvement with information outside the financial statements could add an unwanted "filter."
  • Some investors would like to see a requirement that the auditor read and discuss the earnings release with the audit committee.
"We hope to advance further consideration of these issues by all interested parties through publication of this workshop summary and through continued dialogue with stakeholders and policy makers," said CAQ Executive Director Cindy Fornelli. "It is vitally important that investors understand and continue to trust the work that auditors perform – and have confidence in our financial reporting system and the checks and balances that underlie the system."
 
 
Related articles:

Source: CAQ Press Release

 

You may like these other stories...

Bank Leumi said to face $300 million demand in tax caseDavid Voreacos and Greg Farrell of Bloomberg reported on Wednesday that New York’s banking regulator will ask for more than $300 million to settle an investigation...
Deal to lock in US tax cuts is bubbling up on the HillSome US lawmakers are exploring a post-election deal that would lock in permanent tax cuts for major corporations and low-income families, Richard Rubin of Bloomberg...
Read more from Larry Perry here and in the Today's World of Audits archive.This article discusses basic accounting principles for operating expenses under the FRF for SMEs. Part 2 will address basic auditing procedures....

Already a member? log in here.

Upcoming CPE Webinars

Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.
Nov 19How do you minimize redundant work and unnecessary steps to maximize the amount of work moving through your firm?
Nov 20Kristen Rampe will share how to uncover new opportunities with your clients by asking powerful questions.