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...

Individuals interested in reviewing the proposed 2015 US Generally Accepted Accounting Principles (GAAP) taxonomy from the Financial Accounting Standards Board (FASB) have until October 31 to submit their written comments....
Ernst & Young 2013 audit deficiency rate 49%, regulators sayMichael Rapoport of the Wall Street Journal reported on Thursday that the Public Company Accounting Oversight Board (PCAOB) found deficiencies in 28 of the...
PwC must face $1 billion lawsuit over MF Global adviceA federal judge on Wednesday ordered PricewaterhouseCoopers (PwC) to face a $1 billion lawsuit claiming that its bad accounting advice was a substantial cause of the...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.