2018 Audit Committee Transparency Barometer Released
The Center for Audit Quality and Audit Analytics have issued the fifth edition of their Audit Committee Transparency Barometer , an annual report aimed to help companies and audit committees improve how they communicate to investors, regulators and the public. Per this year’s report, investors and other stakeholders continue to have more information disclosed to them. In addition, more S&P 500 companies are disclosing their considerations in appointing an audit firm, and sharing criteria for reviewing an audit firm. Download the 2018 Audit Committee Transparency Barometer from the Center for Audit Quality website.
CAQ Executive Director to Retire
Cindy Fornelli, executive director of the Center for Audit Quality, has announced that she will retire in the spring of next year. As the CAQ’s first executive director, Fornelli has spent the past 12 years helping carry out the organization’s vision for enhancing investor confidence and public trust in the global capital markets. Accomplishments during her tenure include helping advance audit quality, fighting financial reporting fraud, and encouraging groundbreaking academic research. At this time, plans for Fornelli’s successor are yet to be announced. Click here to read Fornelli’s letter announcing her retirement.
CAQ Board Issues Four Grants for Auditing Research
The Center for Audit Quality’s (“CAQ”) Research Advisory Board grant program recently announced it will fund the following academic research projects focused on how audits are conducted: “How Can Audit Committee Support Improve Auditors’ Application of Professional Skepticism?” by Joseph F. Brazel (North Carolina State University), Anna Gold (Vrije Universiteit Amsterdam), and Tammie Schaefer (University of Missouri – Kansas City) “‘Alexa, Audit Loan Grades’: Enhancing Auditor Reliance on Artificial Intelligence Through Anthropomorphism” by Sean Dennis and Benjamin P. Commerford (University of Kentucky) “Encouraging Relational Thinking to Enhance Auditor Use of Audit Data Analytics Output” by Cassandra Estep, Bright Hong, and. Read More.
CAQ Issues Audit Planning Alert
The Center for Audit Quality (“CAQ”) has issued an alert to improve audit quality and assist in the planning of 2018 audits. Released as Audit Planning Alert for Auditors of Brokers and Dealers , the alert outlines questions auditors of brokers and dealers should consider when preparing audit and attestation engagements. It also focuses on the following areas: Auditing revenue; Auditing related party transactions; Auditing the supplemental information; Performing examination engagements; and Performing review engagements. While certain areas are highlighted in this alert, the CAQ cautions that the guidance should not be considered definitive or all-inclusive. The CAQ advises that the alert must be read alongside the appropriate rules,. Read More.
New CAQ Tool to Help with Cybersecurity Risk Management Oversight
The Center for Audit Quality (“CAQ”) has developed a new tool to help board members oversee enterprise-wide cybersecurity risk management. Cybersecurity Risk Management Oversight: A Tool for Board Members lists questions board members can ask meeting with management and CPA firms about cybersecurity risks and disclosures. Such questions are divided into the following areas: Understanding how the financial statement auditor considers cybersecurity risk. Understanding the role of management and responsibilities of the financial statement auditor related to cybersecurity disclosures. Understanding management’s approach to cybersecurity risk management. Understanding how CPA firms can assist boards of directors in their oversight of cybersecurity risk management. The tool also collects cybersecurity-related resources from. Read More.
New Tool to Help with Implementing FASB Leases Standard
The Center for Audit Quality (“CAQ”) has designed a tool to support audit committees in their implementation of Accounting Standard Codification Topic 842, Leases, by the Financial Accounting Standards Board (“FASB”). Preparing for the Leases Accounting Standard: A Tool for Audit Committees includes a synopsis of Topic 842 and the standard’s requirements. The new tool also lists which questions audit committee members should consider for a successful application. Topic 842, Leases, will be effective in January 2019. A recent poll, however, found that only 21 percent of professionals say their organizations are either “extremely” or “very” prepared to implement the new leases standard.