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Enhancing public trust in the capital markets by promoting high-quality financial reporting.

<p>The Center for Audit Quality</p>

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Discover the latest insights, resources, and standards in auditing and accounting at the Center for Audit Quality (CAQ) website. Access valuable guidance, research, and tools to enhance your expertise and stay informed in the ever-evolving auditing landscape. 

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HS_Trevor Barton

Trevor Barton 

Managing Partner – Quality, Risk & Regulatory, Deloitte & Touche LLP

As we mark Fraud Awareness Week, it’s an opportunity to reflect on the important role auditors play in safeguarding the integrity of our capital markets. At Deloitte, we recognize that the assurance provided by our audit professionals is not just...

As we mark Fraud Awareness Week, it’s an opportunity to reflect on the important role auditors play in safeguarding the integrity of our capital markets. At Deloitte, we recognize that the assurance provided by our audit professionals is not just a regulatory requirement—it’s a cornerstone of trust for investors, boards, and the broader financial ecosystem.
<h3><strong>Integrity, Ethics, and Experience: The Foundation of Audit Quality</strong></h3>
Our audit teams are guided by unwavering ethics, integrity, and a wealth of experience—attributes that are fundamental to delivering quality, value, and trust through our work. This isn’t just about checking boxes—it’s about understanding the complex economic environment and business processes, identifying risk factors, and applying decades of industry knowledge to every engagement.

Schemes to perpetrate fraud continuously evolve—exploiting new technologies and vulnerabilities as they emerge. Our auditors undergo continuous training to stay ahead of emerging threats, including those posed by evolving technologies. By applying advanced analytics and professional skepticism as well as the support of dedicated forensic specialists and other experienced resources, coupled with our deep industry experience and independent mindset, we are better equipped to detect anomalies and patterns that may signal fraudulent activity. This rigor is what drives audit quality and enables us to provide assurance that financial information is materially accurate and complete.

[custom_quote text="Schemes to perpetrate fraud continuously evolve—exploiting new technologies and vulnerabilities as they emerge."]
<h3><strong>The Value of Assurance: Confidence for the Capital Markets</strong></h3>
Ultimately, the work of public company auditors is about instilling confidence. When investors, policymakers, and boards see that financial statements have been audited by independent, credentialed professionals, they can place greater trust and reliance on the financial information shared. This trust is vital to the functioning of our capital markets and the broader economy.

As we observe Fraud Awareness Week, I am proud of the role Deloitte’s auditors play in safeguarding the integrity of our capital markets from fraud and that we remain a leader in the pursuit of quality, transparency, and integrity.

[custom_quote text="Ultimately, the work of public company auditors is about instilling confidence."]

The Power of Assurance in Promoting Integrity and Resilience Against Fraud

Anti-Fraud

Blog Post

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Jeffrey Johanns

Associate Professor of Instruction of Accounting, McCombs School of Business, University of Texas 

Views expressed are those of the author and do not reflect the views or position of the Center for Audit Quality.

Jeffrey Johanns is an Associate Professor of Instruction in the Accounting department at the McCombs School of Business at the...

<em>Views expressed are those of the author and do not reflect the views or position of the Center for Audit Quality.</em>

<em>Jeffrey Johanns is an Associate Professor of Instruction in the Accounting department at the McCombs School of Business at the University of Texas at Austin. He was formerly a U.S. Assurance Risk Management Leader at PricewaterhouseCoopers LLP. </em>

<hr />

Drafting legislation, or regulations and bank credit agreements that require accountants to perform certain functions for that matter, is an imperfect science and sometimes the resulting rules may require further explanation to provide clarity for real-world situations.

In my analysis, this is the case with the recently enacted <em>Guiding and Establishing</em> <em>National Innovation for U.S. Stablecoins Act</em> (the “GENIUS Act” or the “Act”). The GENIUS Act, introduced as bipartisan legislation in 2025, represents the first major federal framework to regulate payment stablecoins in the United States with the objective of providing consumer protection and regulatory clarity for the digital asset ecosystem.

The legislation creates a comprehensive framework for stablecoin issuance, regulation, and reporting, and includes both audit and examination requirements by PCAOB-registered public accounting firms. The details of these requirements may benefit from additional guidance to support effective implementation of the Act.

[custom_quote text="The legislation creates a comprehensive framework for stablecoin issuance, regulation, and reporting..."]
<h3><strong>Audit and Examination Requirements</strong></h3>
<ol>
 	<li>Stablecoin issuers with more than $50 billion in outstanding stablecoins issued (and not already subject to the Securities and Exchange Act of 1934) will need to have full financial statements prepared and audited annually as well as an audit of internal controls, if not otherwise required.</li>
 	<li>All stablecoin issuers will need to prepare and publish monthly reports certified by the CEO and CFO and examined by an external public accounting firm. The monthly reports, posted to the company’s website, must disclose (i) the total number of outstanding payment stablecoins issued by the issuer, and (2) the amount and composition of the reserves backing the outstanding stablecoins. This type of monthly report is commonly known as a “proof of reserves” report.</li>
</ol>
[custom_quote text="All stablecoin issuers will need to prepare and publish monthly reports certified by the CEO and CFO and examined by an external public accounting firm."]
<h3><strong>Questions Raised</strong></h3>
The GENIUS Act specifies that required audits and examinations be performed by a firm registered with the industry’s regulator, the Public Company Accounting Oversight Board (PCAOB). The audit requirement is fairly straightforward: financial statements are prepared in accordance with generally accepted accounting principles (GAAP) and the external audit performed under PCAOB standards.

However, implementation of the GENIUS Act may benefit from additional clarification on the monthly proof of reserves examination reports, which are distinct from an audit and serve a different purpose.

An “examination” is similar, but different, from an “audit”. Both represent forms of positive assurance, but the rules and objectives are different. For example, in an examination, the auditor reports on the fairness of a management assertion, not on financial statements, and generally accepted accounting principles are replaced with management’s self-defined criteria underlying its assertion.

The following questions regarding examination requirements under the GENIUS Act warrant further explanation by policymakers:
<ol>
 	<li><strong>What is the scope of the PCAOB’s authority?:</strong> As discussed above, the Act requires that any firm performing an examination be registered with the PCAOB. However, the PCAOB’s oversight authority under the Sarbanes-Oxley Act (SOX) is understood, in language and practice, to apply only to financial statement audits. The PCAOB has confirmed this limited scope in other circumstances, and the PCAOB Board has publicly asserted that inspection of proof of reserves reports is beyond the scope of SOX. Thus, because proof of reserves reports are not traditional financial statements, it may be reasonable to conclude that the PCAOB will not be able to require use of its standards, nor is its authority to inspect an external accounting firm’s work, or bring enforcement actions against firms performing poor work in their examinations clear based on the letter of the law. It remains unclear whether Congress intended examinations to fall under the PCAOB’s regulatory scope, and whether the Board will modify its current position on the scope of its authority.  Follow-on legislation may be necessary to clarify the specific actions required, and the responsible parties. If examinations remain outside of the PCAOB’s scope, consideration should be given to whether these engagements would be subject to peer review at some level. It is a positive development that Congress assigned attestation authority to CPA firms, however that authority should come with a corresponding obligation for quality. The PCAOB’s established framework for inspection and enforcement makes it well-positioned to provide oversight in this area.</li>
 	<li><strong>Are these firms required to implement QC 1000?:</strong> The PCAOB’s recently adopted QC 1000, effective December 15, 2026, includes new requirements for an audit firm’s internal quality control system, including an annual internal evaluation of the effectiveness of the quality control system. The design requirement applies even if the firm hasn’t performed any financial statement audits. Firms intending to only perform proof of reserves examinations may find the QC 1000 requirements excessive. Due to the high-risk nature of proof of reserves examinations, firms performing this service would benefit from designing and implementing internal control systems subject to full QC 1000 compliance. Again, the question of the PCAOB’s authority hangs over the QC 1000 compliance matter.</li>
 	<li><strong>Why does the Act require the examination to be performed by PCAOB registered firms if the PCAOB does not provide oversight over examinations beyond registration?:</strong>Some firms that want to perform proof of reserves examinations are not currently registered with the PCAOB because they don’t audit public companies and may not want to go through a registration process. It could be that registration alone may have been viewed as a “seal of approval” of firms providing examination attestations, yet the PCAOB does not permit the use of registration as a marketing tool and has consistently made it clear that registration is not correlated to quality. It will be important for stakeholders to understand the scope of the PCAOB’s role and what authority it possesses.</li>
 	<li><strong>Did Congress intend that only PCAOB standards be applied to stablecoin examinations or will use of AICPA or international standards be allowed?:</strong> The Genius Act does not specify that PCAOB attestation standards must be used in examinations performed under the requirements of the Act. In fact, most examinations are currently performed in accordance with AICPA standards. The PCAOB is in the process of updating its extant examination standards to remain in accordance with AICPA and international standards. It remains to be seen whether the PCAOB will accelerate its standard-setting project beyond those of the AICPA and other international bodies or just seek alignment.</li>
</ol>
The effective date of the GENIUS Act is January 18, 2027 - 18 months after the date of its enactment, July 18,2025.  This is an important piece of legislation intended to provide clarity and consumer protections related to stablecoin payment. In my reading, these questions need to be answered, through the rulemaking process or other means as may be necessary, to clarify the GENIUS Act’s requirements before it goes into effect.

[custom_quote text="It remains unclear whether Congress intended examinations to fall under the PCAOB’s regulatory scope, and whether the Board will modify its current position on the scope of its authority. "]

&nbsp;

What Does the GENIUS Act Require of Accountants?

Erin Cromwell, CPA is a Senior Manager, Professional Practice at the Center for Audit Quality. Joining the CAQ in 2022, Cromwell manages and supports technical and policy-oriented projects through working groups and task forces with senior audit leaders.

Prior to joining the CAQ, Cromwell worked in KPMG’s audit practice, focusing on both integrated and non-integrated audit engagements for companies in the telecommunications and aerospace and defense industries. She also spent time with KPMG’s environmental, social, and governance (ESG) team, KPMG IMPACT, focusing on ESG attestation and other non-audit services for audit clients.

Cromwell is a Certified Public Accountant in Virginia and holds a bachelor’s degree in accounting from the University of Richmond.

Erin Cromwell, CPA

In recent years, the impact of artificial intelligence (AI), from streamlining corporate operations to new products for the public, has dominated the business headlines. Leading technology companies have invested billions into AI data centers to support increasing demand for AI...

In recent years, the impact of artificial intelligence (AI), from streamlining corporate operations to new products for the public, has dominated the business headlines. Leading technology companies have <a href="https://www.theguardian.com/technology/2025/aug/02/big-tech-ai-spending">invested billions</a> into AI data centers to support increasing demand for AI – and that demand is showing no signs of slowing down.

Public companies across industry sectors are also investing heavily in this technology, embedding AI into day-to-day operations, business processes, and customer experiences. But for these investments to succeed, one element is essential: trust.

From investors and regulators to employees and everyday consumers, stakeholders want to know that AI-enabled systems and outputs are reliable, transparent, secure, and used responsibly. This is where auditors come in.

In my role at the Center for Audit Quality (CAQ), I work closely with senior audit leaders to understand the impact of AI and other advanced technologies on public companies, our profession, and the capital markets.

Our new publication, <a href="https://www.thecaq.org/rota-ai"><em>The Role of the Auditor in AI: Present and Future</em></a>, explores how companies are using AI, challenges giving rise to a lack of trust in the technology, and why auditors are uniquely positioned to enhance trust and confidence in AI. Read on for my key takeaways about how auditors’ tried-and-true approach and evolving skillset supports this ever-changing landscape.

[custom_quote text="Stakeholders want to know that AI-enabled systems and outputs are reliable, transparent, secure, and used responsibly."]
<h3><strong>How Public Companies Use AI Today</strong></h3>
Companies across industries are embedding AI in various ways, with the goal of enhancing the efficiency and effectiveness of operations and improving employee and customer experiences. In the CAQ’s <a href="https://www.thecaq.org/audit-partner-pulse-survey">Spring 2025 Audit Partner Pulse Survey</a>, audit partners pointed to the top five areas of AI use:
<ul>
 	<li>Process automation (59%)</li>
 	<li>Customer experience, service, and support (48%)</li>
 	<li>Predictive analysis (28%)</li>
 	<li>Targeted marketing (26%), and</li>
 	<li>Cybersecurity (22%).</li>
</ul>
The level of reliance on AI in these areas can vary. In critical processes, such as financial reporting, human oversight remains essential to ensure accuracy and reliability. In other processes, AI may be able to operate with limited human involvement, automating certain activities, and freeing employees for higher-value work. Trust is a critical factor to support reliance on AI.

[custom_quote text="In critical processes, such as financial reporting, human oversight remains essential to ensure accuracy and reliability."]
<h3><strong>Transparency and Disclosures Around AI</strong></h3>
As AI adoption expands, stakeholders are asking for greater transparency. Companies are beginning to disclose information about their AI strategies, risks, and governance, both in regulatory filings and in voluntary reports.

Many companies have begun including AI-related information in their Form 10-K filings. <a href="https://www.thecaq.org/sp-500-and-ai-reporting">Our analysis of Form 10-Ks filed with the SEC in 2024</a> found that 72% of S&amp;P 500 companies discussed AI, often highlighting risks in <em>Item 1A. Risk Factors</em> or detailing investments and strategy in <em>Item 1. Business.</em> These disclosures show that AI is shaping both risks and opportunities.

Beyond regulatory filings, many companies have published their AI principles and governance frameworks on their websites. These often emphasize values like accountability, transparency, reliability, and privacy. Some companies at the leading edge are also releasing standalone reports on their approach to responsible AI. Voluntary adoption of frameworks, such as the <a href="https://www.nist.gov/itl/ai-risk-management-framework">NIST AI Risk Management Framework</a>, is also common. These steps signal that companies are approaching AI with rigor and responsibility.

As the frameworks and regulations around AI continue to evolve, the CAQ will continue to monitor and share resources as they become available.

[custom_quote text="Many companies have begun including AI-related information in their Form 10-K filings."]
<h3><strong>Challenges in Building Trust in AI</strong></h3>
While AI has the potential to transform businesses, it presents new challenges that can undermine stakeholder trust if not managed effectively:
<ul>
 	<li><strong>Explainability and Interpretability: </strong>AI can be a “black box,” making it difficult for users to understand how or why a system produced a given output. Stakeholders may be concerned with how companies evaluate the appropriateness of outputs from AI tools.</li>
 	<li><strong>Reliability and Accuracy: </strong>AI systems, particularly generative AI, can hallucinate, producing false but convincing outputs. Errors can shake confidence when stakeholders expect consistency.</li>
 	<li><strong>Data Privacy and Cybersecurity:</strong> AI tools may inadvertently expose sensitive data or create new vulnerabilities to cyberattacks. <a href="https://www.thecaq.org/institutional-investor-survey-artificial-intelligence">Surveys</a> show that investors are highly concerned about privacy and security risks associated with AI use.</li>
 	<li><strong>Responsible and Ethical Use:</strong> Stakeholders expect companies to use AI fairly, ethically, and in compliance with regulations. Issues like bias, discrimination, and lack of transparency can create reputational and regulatory risks.</li>
</ul>
Companies are at different stages in addressing these issues, but one theme is clear: stakeholders are seeking greater confidence that companies are using AI responsibly and effectively managing risks related to the use of AI.

[custom_quote text="AI tools may inadvertently expose sensitive data or create new vulnerabilities to cyberattacks."]
<h3><strong>The Auditor’s Expanding Role in AI</strong></h3>
A report from <a href="https://www.ey.com/en_gl/insights/ai/how-a-license-to-lead-can-transform-human-potential-in-an-ai-world">EY</a> found that respondents across the globe have low levels of trust that companies will manage AI with their best interests in mind. Independent assurance provided by trusted gatekeepers – public company auditors – can help bridge trust gaps and provide confidence that companies are managing AI responsibly. Public company auditors bring independence, rigorous professional standards, and deep expertise in evaluating systems and controls, setting them apart from other assurance providers.

AI assurance services directly address a company’s use of AI, such as their design and implementation of AI governance policies or procedures, their controls designed and implemented to address relevant risks in critical business processes and supporting technologies, or their compliance with AI-related regulations. These services can enhance stakeholder trust and confidence in AI by providing insights about how the company manages its use of AI.

Firms like <a href="https://kpmg.com/us/en/media/news/kpmg-expands-ai-trust-services-with-new-ai-assurance-capabilities.html">KPMG</a> and <a href="https://www.pwc.com/us/en/about-us/newsroom/assurance-ai-press-release.html">PwC</a> have recently announced new AI assurance services to help companies meet the need for greater trust in their use of AI. This is the <a href="https://www.thecaq.org/AuditEffect">Audit Effect</a> in action; auditors applying their unique skillset to enhance confidence in new forms of company-reported information. And while AI assurance is in the early stages and continuing to evolve, stakeholders can look to public company auditors to bring increased trust and transparency to the use of AI.

The CAQ will continue to monitor AI’s impact on the public company auditing profession and U.S. capital markets. For the latest insights, explore more <a href="https://www.thecaq.org/resource-hub">resources</a> and follow the CAQ on <a href="https://www.linkedin.com/company/center-for-audit-quality">LinkedIn</a>.

[custom_quote text="Firms like KPMG and PwC have recently announced new AI assurance services to help companies meet the need for greater trust in their use of AI."]

Building Trust in AI: Why Assurance is Essential

Auditors

Emerging Reporting Areas

Liz Barentzen is the Vice President, Operations and Talent Initiatives at the Center for Audit Quality, where she oversees day-to-day and long-term strategic operations, as well as leads and advances strategic profession-wide initiatives to attract and retain talent.

Previously, Barentzen was the Chief Culture Officer at Sol Systems LLC, a national solar finance, investment and development firm. In that role she worked to drive organizational effectiveness and helped manage change through a rapid period of growth, while overseeing all recruitment, learning, and retention initiatives. Prior to Sol Systems, Barentzen was the Director of Workforce Relations at the Overseas Private Investment Corporation, where she served as strategic and legal counsel to management and oversaw training and development, HRIS, benefits, total rewards, HR administration, performance management, and internal investigations.

Barentzen has 20 years of experience in Human Capital and is an Associate Certified Coach through the Georgetown Leadership Coaching program. A member of the New York Bar, she holds a JD from Brooklyn Law School and a BA in psychology from New York University.

Liz Barentzen

The audit and accounting profession has long grappled with how to engage the next generation of talent as an unprecedented number of CPAs reach retirement. Since 2021, the Center for Audit Quality (CAQ) has conducted comprehensive research into student perceptions...

The audit and accounting profession has long grappled with how to engage the next generation of talent as an unprecedented number of CPAs reach retirement. Since 2021, the Center for Audit Quality (CAQ) has conducted comprehensive research into student perceptions of, and openness to, a career in accounting to inform our <a href="https://www.joinaccountingplus.com/">Accounting+</a> campaign.

Accounting+ is working to attract high school and early college students to the profession by dispelling misperceptions, providing in-classroom education, and connecting them to professional opportunities with our partners. Our pipeline research helps us understand student perceptions of accounting, their education and career priorities, and which accounting messages resonate the best.

The CAQ's 2024 report with Edge Research, <a href="https://www.thecaq.org/expanding-the-accounting-profession-pipeline"><em>Expanding the Accounting Profession Pipeline</em></a>, builds on our initial 2021 data and reveals that many students still lack exposure to accounting careers, resulting in continued difficulty in improving accounting program enrollment. However, when exposed to messaging that highlights the benefits of a career in accounting, student interest increases – highlighting the importance of reaching students before they make critical higher education decisions.

Through our partnership with EVERFI, we’ve developed a digital course that helps students explore accounting careers in high school classrooms. During the 2024-2025 school year, we reached over 96,000 students in 3,724 schools, and surveyed course participants to understand their perceptions of accounting before and after taking the course.

Our newest report, <a href="https://everfi.com/white-papers/k-12/career-interest-and-perceived-value-of-accounting/"><em>Career Interest and Perceived Value of Accounting</em></a>, shines a light on how to better foster meaningful connections with students. The main takeaway underscores our previous findings: early exposure to accounting careers leads to increased interest and openness to pursuing an accounting degree. Keep reading for more details on our research.

[custom_quote text="During the 2024-2025 school year, we reached over 96,000 students in 3,724 schools."]
<h3><strong>Career Decision-Making Trends</strong></h3>
The CAQ's 2024 study with Edge Research found that fewer students are selecting their intended college major in high school (33% in 2024 compared to 39% in 2021), but of those who decide in high school, 44% are doing so by sophomore year. This indicates that the window to engage students is shifting, especially as they weigh questions about college affordability, job stability, and long-term earning potential.

Our findings also uncovered that financial security and job flexibility are more important to students than ever, likely attributed to the current economic environment. In 2024, around 66% of students expressed that having a job that is always in demand was important to them when choosing a future career compared to 59% in 2021.

While students still value purpose and passion, especially among Black and Hispanic populations, they are increasingly focused on outcomes they can measure, such as income, advancement, and adaptability. This is a key moment where students’ career values are naturally aligned with traditional attributes in accounting, giving the profession the opportunity to introduce unfamiliar students to a career that provides them with the stability and economic freedom they’re searching for.

[custom_quote text="Students are increasingly focused on outcomes they can measure, such as income, advancement, and adaptability."]
<h3><strong>The Role of In-Classroom Exposure</strong></h3>
EVERFI’s research offers a unique view into how student perceptions can change when they receive structured exposure to accounting. Their research sample included over 5,600 high school students enrolled in our digital course, <a href="https://www.thecaq.org/news/the-center-for-audit-quality-and-everfi-create-limitless-opportunities-in-the-accounting-field"><em>Accounting Careers: Limitless Opportunities</em></a>, and showed that our efforts to engage students in the classroom are working.

After taking the course:
<ul>
 	<li>81% of students report that they discovered accounting career paths they hadn’t known about before.</li>
 	<li>89% of students agreed that accounting skills were essential to achieving their professional goals.</li>
 	<li>Student interest in accounting careers increased by 20%.</li>
 	<li>Students’ perception of the value of accounting skills improved by 11% overall.</li>
</ul>
Black, Hispanic, and female students reported the greatest increases in interest and perceived skill value—findings that align with the exposure gaps identified in our 2024 report. Students from low- to middle-income (LMI) schools also showed strong gains, highlighting the importance of reaching those least likely to have informal exposure to the profession.

[custom_quote text="Black, Hispanic, and female students reported the greatest increases in interest and perceived skill value."]
<h3><strong>Why Sequencing Outreach Matters</strong></h3>
When comparing the two studies side by side, one clear insight emerges: the most effective messaging evolves alongside student exposure to careers in accounting.

At the outset, students are most drawn to content that reflects their financial and personal goals. However, once they have meaningful engagement, such as completing a course or attending a school event, they become more open to messages about impact, purpose, and the role of accounting in broader industries like sports, tech, and entertainment.

These findings influence our full-funnel approach to Accounting+. We aim to meet students where they are, speak to what matters most to them, and introduce new dimensions of the profession once interest is sparked.

[custom_quote text="We aim to meet students where they are, speak to what matters most to them, and introduce new dimensions of the profession once interest is sparked."]
<h3><strong>Where We Go from Here</strong></h3>
Together, the two research reports reveal the need for early, structured outreach:
<ul>
 	<li>Students are ready to engage—but we must reach them before they make critical education and career decisions.</li>
 	<li>Personal connection to the profession remains limited, particularly for Black and Hispanic students, but we can elevate stories of current leaders to show students what’s possible.</li>
 	<li>Digital tools and in-school curriculum are proving to be scalable, effective strategies.</li>
</ul>
Accounting+ continues to build momentum, but the talent pipeline challenge requires a profession-wide approach. Our research makes a strong case for increased investment in high school accounting programs, especially in schools serving underrepresented students, as both studies reveal the critical importance of personal connections, early career decision-making, and the transformation potential of targeted interventions.

Follow the CAQ on <a href="https://www.linkedin.com/company/center-for-audit-quality">LinkedIn</a> to stay up to date on our talent initiatives.

Bridging the Gap: What New Research Tells Us About Attracting Future Accountants

Talent

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Headshot_Barton_Trevor

Trevor Barton

Managing Partner, Quality, Risk & Regulatory, Deloitte & Touche LLP

The audit profession is undergoing a profound transformation, driven by the rapid advancement of artificial intelligence (AI). No longer a futuristic concept, AI is actively reshaping how we approach assurance, impacting financial reporting and the profession as a whole. While...

The audit profession is undergoing a profound transformation, driven by the rapid advancement of artificial intelligence (AI). No longer a futuristic concept, AI is actively reshaping how we approach assurance, impacting financial reporting and the profession as a whole. While AI brings new tools to the audit, for public company auditors, it reinforces a long-standing responsibility: upholding trust in the capital markets.

Auditor oversight of AI can establish trust and confidence when integrating emerging technologies into our work processes, especially as investors seek greater clarity around AI use. In the <a href="https://www.thecaq.org/institutional-investor-survey-artificial-intelligence">CAQ’s latest Institutional Investor survey</a>, oversight of AI emerged as a top issue for institutional investors as more companies deploy the technology across accounting, operations, and disclosures.

My colleagues across the profession and I know that algorithms alone cannot build confidence in financial reporting. Auditor independence, transparency, and tailored experience have long defined the audit profession and will remain essential in this new era of audit.

[custom_quote text="Auditor oversight of AI can establish trust and confidence when integrating emerging technologies into our work processes."]
<h3><strong>The Human Element Remains Central</strong></h3>
While AI offers significant advantages, human involvement remains critical. One way we approach this at Deloitte is to blend the power of AI with the knowledge, experience, and professional judgment of experienced auditors. AI technologies augment our capabilities, but human oversight grounds an audit in the essential elements of trust, transparency, and accountability.

Here are some ways we integrate human oversight:
<ul>
 	<li><strong>Review and Validation:</strong> AI-generated insights are carefully reviewed and validated by experienced auditors, who apply their professional skepticism and judgment to determine accuracy and completeness.</li>
 	<li><strong>Explainability and Transparency:</strong> We prioritize explainable AI, focusing on understanding the decision-making processes of AI systems to determine transparency and understandability.</li>
 	<li><strong>Bias Mitigation:</strong> We actively work to mitigate potential biases in AI systems, focusing on fairness and objectivity in our audit procedures.</li>
 	<li><strong>Ethical Considerations:</strong> Ethical considerations are at the forefront of our AI implementation strategy. We adhere to the <a href="https://www2.deloitte.com/us/en/pages/deloitte-analytics/solutions/ethics-of-ai-framework.html">Trustworthy AI framework</a> to drive responsible use of technology.</li>
</ul>
AI is a powerful tool that augments our capabilities, yet the foundation of our audits' quality, integrity, and trustworthiness rests upon our auditors' experience, judgment, and ethical commitment.

[custom_quote text="AI technologies augment our capabilities, but human oversight grounds an audit in the essential elements of trust, transparency, and accountability."]
<h3><strong>Building Trust Through Transparency</strong></h3>
Transparency is key in our AI-driven audits. We're strategically integrating AI into our existing Deloitte Omnia platform to enhance our capabilities while upholding the core principles of trust, transparency, and accountability using our <a href="https://www2.deloitte.com/us/en/pages/deloitte-analytics/solutions/ethics-of-ai-framework.html">Trustworthy AI framework</a>.

AI's capabilities are revolutionizing the financial statement audit in several key ways:
<ul>
 	<li><strong>Enhanced Accuracy and Efficiency:</strong> AI-powered tools automate routine tasks like data entry, reconciliation, and report generation, significantly reducing the risk of manual errors and freeing up auditors to focus on more complex activities. This leads to more efficient audits and high-quality financial reporting. The ability to analyze entire datasets, rather than relying on sampling, further enhances accuracy and allows for the identification of subtle anomalies that might otherwise go undetected.</li>
 	<li><strong>Improved Risk Assessment:</strong> AI algorithms can analyze vast amounts of data to identify patterns and anomalies that might indicate risks or fraudulent activities. This proactive approach allows for earlier detection and mitigation of potential issues, strengthening the overall integrity of financial reports. Predictive analytics, a rapidly developing area, allows for proactive risk identification and assessment.</li>
 	<li><strong>On-Demand Coaching</strong>: Use of AI provides auditors with suggestions to improve clarity and completeness of documentation in alignment with audit guidance. This on-demand coaching results in the development of high-quality documentation that streamlines subsequent reviews while also supporting professional development real-time.</li>
</ul>
The key to success when using AI is that auditors must remain central to the process. While investors want to know if companies are utilizing AI, they also want to ensure that the technology is governed properly and with a human perspective. Auditors' independent oversight can create trust in the audit, build investor confidence, and help <a href="https://www.thecaq.org/AuditEffect">power the American economy</a>.

[custom_quote text="The key to success when using AI is that auditors must remain central to the process."]
<h3><strong>The Future of the Profession</strong></h3>
The integration of AI is not just about improving efficiency; it's about fundamentally changing the nature of the audit profession. Auditors will need to develop new skills to effectively leverage AI tools and interpret the insights they provide. This requires a commitment to continuous learning and experimentation with emerging technologies. The profession is evolving toward a more data-driven and analytical approach, demanding a higher level of technical experience. However, the core values of professional judgment, critical thinking, and ethical conduct will remain paramount.

At Deloitte, we're committed to harnessing the power of AI responsibly, ensuring that technology serves to strengthen the core principles of our profession and build greater trust in financial reporting. The future of audit is not about replacing human auditors with machines; it's about empowering auditors with the tools they need to perform their critical role more effectively and efficiently in an increasingly complex world.

Learn more about innovation in the audit through the <a href="https://www.thecaq.org/AuditEffect">Audit Effect</a>.

Auditors and AI in the New Era of Audit

Artificial Intelligence

Audit Committee Effectiveness: A Webinar Series
Audit committees should regularly (at least annually) evaluate the external auditor in fulfilling their duty in order to make an informed recommendation to the board whether to retain the external auditor. Robust, two-way dialogue that...

<h4>Audit Committee Effectiveness: A Webinar Series</h4>
Audit committees should regularly (at least annually) evaluate the external auditor in fulfilling their duty in order to make an informed recommendation to the board whether to retain the external auditor. Robust, two-way dialogue that includes constructive feedback to the external auditor may improve audit quality and enhance the relationship between the audit committee and the external auditor.

Join us for a discussion from both sides of the aisle – audit committee members and the auditor – about how to effectively perform this assessment. We’ll discuss the just released 2025 update of the CAQ’s External Auditor Assessment Tool for Audit Committees.

<strong>Note</strong>: This webcast is eligible for 1 CPE credit to those who attend the webcast live.

<img class=" wp-image-12997 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2022/11/CAQ_NACD_400x150.png" alt="CAQ NACD" width="200" height="75" />

<em>Audit Committee Effectiveness: A Webinar Series is brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the financial reporting ecosystem alongside resources developed to aid audit committees and public company board members.</em>

External Auditor Assessment Webinar: Who, Why, What, When and How

Audit Committee

Webinar

Event

Join the Anti-Fraud Collaboration (AFC) in our webcast to explore the pervasiveness and impact of fraud at U.S. public companies and gain insights into recent survey findings that shed light into the current fraud risk environment and leading practices for...

Join the Anti-Fraud Collaboration (AFC) in our webcast to explore the pervasiveness and impact of fraud at U.S. public companies and gain insights into recent survey findings that shed light into the current fraud risk environment and leading practices for fraud deterrence and detection. A panel of multi-stakeholder experts will discuss findings from a joint survey from ACFE-AFC on The Impact of Fraud at U.S. Public Companies and CAQ’s 2025 Institutional Investor Survey, and provide insights into the current level of fraud and fraud losses experienced by U.S. public companies, factors that contribute to and can mitigate the most prevalent fraud risks faced by companies in the current environment, identifying and assessing the likelihood and significance/magnitude of those factors, and areas of focus for enhancing the effectiveness of fraud deterrence and detection.

<a href="http://www.antifraudcollaboration.org"><img class="alignnone size-full wp-image-9863" src="https://www.thecaq.org/wp-content/uploads/2020/05/AFC-Logo_35px.png" alt="Anti-Fraud Collaboration Logo" width="265" height="35" /></a>

<em><strong>Note</strong>: The virtual event was eligible for 1 CPE credit.
</em>

The Impact of Fraud on U.S. Public Companies

Audit Committee Effectiveness: A Webinar Series
Welcome to Audit Committee Effectiveness: a webinar series brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the...

<h4>Audit Committee Effectiveness: A Webinar Series</h4>
<em>Welcome to Audit Committee Effectiveness: a webinar series brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the financial reporting ecosystem alongside resources developed to aid audit committees and public company board members. Stay tuned to this page for information about topics, participants, and how to register for upcoming webinars.</em>

<img class=" wp-image-12997 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2022/11/CAQ_NACD_400x150.png" alt="CAQ NACD" width="200" height="75" />

Join us for a discussion about the fourth edition of the Audit Committee Practices Report, a collaboration between Deloitte’s Center for Board Effectiveness and the Center for Audit Quality. Based on survey findings, this webinar offers audit committee members and those who work with them an opportunity to hear about committee priorities, challenges, and opportunities, as well as leading practices around audit committee effectiveness.

<em><strong>Note</strong>: This webcast was eligible for 1 CPE credit to those who attended the webcast live.</em>

2025 Audit Committee Practices Report

<h4>Audit Committee Effectiveness: A Webinar Series</h4>
<em>Welcome to Audit Committee Effectiveness: a webinar series brought to you by the Center for Audit Quality and the National Association of Corporate Directors. The series explores key takeaways and insights from leaders in the financial reporting ecosystem alongside resources developed to aid audit committees and public company board members. Stay tuned to this page for information about topics, participants, and how to register for upcoming webinars.</em>

<img class=" wp-image-12997 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2022/11/CAQ_NACD_400x150.png" alt="CAQ NACD" width="200" height="75" />

In our initial AI 101 for Audit Committees <a href="https://www.thecaq.org/artificial-intelligence-ai-101-for-audit-committees">webinar</a>, we tackled how recent advancements, powered by the likes of OpenAI’s ChatGPT and Google’s Gemini, has captured the attention of corporate leaders around the world.  Corporate boards are focusing on better understanding the technology and establishing guardrails to ensure risks of information security, data quality, hallucinations, and other areas are appropriately managed.

Now, in the second of a 2-part series, speakers <a href="https://www.ey.com/en_us/people/richard-jackson">Richard Jackson</a> (Global Artificial Intelligence Assurance Leader, EY) and <a href="https://www.linkedin.com/in/hrncirik/">Cory Hrncirik</a> (Modern Finance Lead, Microsoft) join us again with <a href="https://www.nacdonline.org/philadelphia/philadelphia-leadership/tom-petro/">Tom Petro</a> (Managing Partner, Capital Partners &amp; Audit Committee Member) to discuss how things have evolved in just the past 8 months.

We’ll discuss the evolving role of the audit committee, including oversight of both management and the external auditor. We’ll dive into such questions as:
<ul>
 	<li>Does the company have the requisite expertise to select, develop, deploy, and monitor genAI technologies?</li>
 	<li>Who (individual or group) in the company is responsible for oversight of the use of genAI?</li>
 	<li>Does the company have a process to track and monitor the use of genAI throughout the company, including use by third-party service providers?</li>
 	<li>What is the auditor’s understanding of the financial reporting implications of the company’s use of genAI technologies?</li>
 	<li>Does the company’s use of genAI technologies have a significant impact on the planned audit scope?</li>
 	<li>Has the auditor identified any fraud risks related to the company’s use of genAI technologies? How has the auditor addressed such risks in the audit?</li>
</ul>
<strong><em>Note</em></strong><em>: CPE available only to participants who joined the live webcast. </em>

<em>See the CAQ’s resources for more information: <a href="https://www.thecaq.org/wp-content/uploads/2024/04/caq_auditing-in-the-age-of-generative-ai__2024-04.pdf">Auditing in the Age of Generative AI</a> and  <a href="https://www.thecaq.org/ac-oversight-in-the-age-of-genai">Audit Committee Oversight in the Age of Generative AI</a>.</em>

Artificial Intelligence (AI) 101 For Audit Committees - Part II

This hour-long webcast will showcase emerging issues facing public companies and their auditors. It will feature Christine Gunia, Director of the PCAOB’s Division of Registration and Inspections, and representatives from the public company auditing profession. Panelists will discuss PCAOB inspection...

This hour-long webcast will showcase emerging issues facing public companies and their auditors. It will feature Christine Gunia, Director of the PCAOB’s Division of Registration and Inspections, and representatives from the public company auditing profession. Panelists will discuss PCAOB inspection findings and areas of focus as well as audit firm best practices.

<em><strong>Note</strong>: CPE available only to participants who joined the live webcast.</em>

Audit Insider Webinar | October 2024

Policymakers

Audit Quality

Washington D.C., June 5, 2025 – The Center for Audit Quality (CAQ) has released its Spring 2025 Audit Partner Pulse Survey, providing insights from audit partners at the nation’s leading public company audit firms. Now in its fourth year, the...

<strong>Washington D.C., June 5, 2025</strong> – The Center for Audit Quality (CAQ) has released its Spring 2025 Audit Partner Pulse Survey, providing insights from audit partners at the nation’s leading public company audit firms. Now in its fourth year, the survey captures audit partners’ views on the future of the U.S. economy, evolving business risks, and workforce trends. As trusted experts with a front-row seat to corporate strategy and performance, audit partners provide a unique lens into how U.S. companies are navigating a period marked by economic uncertainty, geopolitical tension, and rapid technological change.

Key findings from the report include:

<strong>Increasing Economic Pessimism</strong>
<ul>
 	<li>The percentage of audit partners expressing pessimism about the U.S. economy surged from 10% in Fall 2024 to 44% today, while optimism dropped by more than half, from 38% to 15%.</li>
 	<li>Fear of a potential recession, ongoing geopolitical instability and trade uncertainties have prompted companies to double down on financial performance, cost management, and risk mitigation strategies.</li>
</ul>
<strong>Shifting Workforce Strategies</strong>
<ul>
 	<li>While many companies are reducing headcount, they are simultaneously investing in upskilling existing employees.</li>
 	<li>Respondents also underscored the growing importance of strong anti-fraud cultures, especially as economic stressors heighten risk across industries.</li>
</ul>
<strong>Integration of New Technologies</strong>
<ul>
 	<li>AI adoption continues to grow across industries, primarily to improve customer service and streamline internal operations.</li>
 	<li>Despite increasing regulatory attention and high-profile initiatives like the SEC’s new Crypto Task Force, audit partners report limited cryptocurrency-related investments among public companies.</li>
</ul>
“Audit partners offer a valuable window into today’s complex business environment, helping us better understand the challenges companies face and the strategies they’re using to move forward,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “Despite economic uncertainty, it’s encouraging to see companies investing in innovation, upskilling their workforce, and strengthening cultures of integrity as they build a foundation for long-term resilience and growth.”

Download the <a href="https://www.thecaq.org/audit-partner-pulse-survey">Spring 2025 Audit Partner Pulse Survey</a> to see the full results.

+++

<strong>About the Center for Audit Quality</strong>

The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility, and transparency of public company audits;</li>
 	<li>Advancing critical issues affecting public company audits;</li>
 	<li>Driving innovation in assurance; and</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

Audit partners say economic uncertainty and geopolitical risks rise, while companies continue integrating AI to improve customer experience, according to latest survey.

In collaboration with Edge Research, the Center for Audit Quality released a new report exploring shifts in student perceptions of accounting and identifying messaging strategies to broaden the talent pool. The findings build on research conducted from 2021 to 2023...

<em>In collaboration with Edge Research, the Center for Audit Quality released a new report exploring shifts in student perceptions of accounting and identifying messaging strategies to broaden the talent pool. The findings build on research conducted from 2021 to 2023 and offer key insights into today’s educational landscape.</em>

<strong>Washington D.C., April 28, 2025</strong> – In recent years, the accounting profession has undertaken a rebranding initiative aimed at dispelling common misperceptions among students and highlighting the breadth, impact, and relevance of careers in accounting. Several years after the Center for Audit Quality (CAQ) launched its Accounting+ campaign to fight this bias and inform students of the myriad opportunities an accounting career can offer, new research assesses the campaign’s progress and the new challenges it has uncovered.

The CAQ partnered with Edge Research on the report, <a href="https://www.thecaq.org/expanding-the-accounting-profession-pipeline">Expanding the Accounting Profession Pipeline: 2024 Update</a>, to better understand high school and early college students’ academic and professional motivations and to identify the most successful strategies to attract the next generation of accountants.

<em>“This research is an important step toward understanding both the persistent challenges and the emerging opportunities in building a strong accounting talent pipeline. It’s encouraging to see growing interest among students. This is proof that when we listen, learn, and adapt, we can positively impact the talent pipeline.”</em> - Julie Bell Lindsay, CEO, the Center for Audit Quality.

Some key findings from the report include:
<ul>
 	<li>Significant improvements have been made in how students view accounting careers with notable increases in seeing accounting as a career that is meaningful and provides value, has strong long-term earning potential, and a good work-life balance. These positive shifts indicate the professions’ collective efforts to transform accounting’s image are gaining traction.</li>
 	<li>Practical, benefit focused messaging drives interest with students, especially messages that highlights accounting’s strong salary potential, career flexibility, and job security, and emphasizing these points as strengths within the accounting profession resonated strongly amongst all demographics in the study.</li>
 	<li>Direct exposure to accounting strongly correlates with interest in accounting. With many students lacking personal connections to accountants, the profession must continue meeting students where they are – both in classrooms and on social media. Accounting professionals can maximize their impact by using Accounting+ evidence-based messaging on salary potential, career flexibility and job security- approaches shown to significantly increase student interest.</li>
</ul>
<em>“In a time of economic uncertainty, young people are making deliberate choices to prioritize stability and flexibility in their careers like never before. This presents a challenge, but also a tremendous opportunity for the accounting profession. For students, especially those from underserved communities, this isn’t just about employment. It’s about building a future and creating generational wealth."</em> - Liz Barentzen, Vice President, Talent, the Center for Audit Quality.

According to the <a href="https://www.thecaq.org/accounting-annual-report">Accounting+ 2024 annual report</a>, many of these key messaging and outreach strategies deeply resonated with student populations. Accounting+ reached students more than 2 billion times via paid advertising, social media, and other digital platforms, leading to 26 million website visits in 2024 (an 86% increase from 2023) and 8 million new users (a 100% increase from 2023). The updated research shows encouraging progress in shifting the perception of accounting careers among students; however, significant roadblocks remain in translating this perception into increased enrollment numbers. A continued profession-wide, comprehensive approach is crucial to engage new students and provide educators with the resources they need to build a stronger, more competitive talent pool.

Download the full report <a href="https://www.thecaq.org/expanding-the-accounting-profession-pipeline">here</a> to learn more about the results.

<strong>About the Research</strong>

The CAQ commissioned Edge Research to perform a comprehensive follow-up on their <a href="https://thecaqprod.wpenginepowered.com/wp-content/uploads/2023/07/caq_increasing-diversity-in-the-accounting-profession-pipeline_2023-07.pdf">2023 report</a> to assess the progress of initiatives like Accounting+, identify new engagement opportunities, and understand the evolving student mindset in “Expanding the Accounting Profession Pipeline.”

Edge Research employed a mixed-methods approach combining quantitative and qualitative methodologies to gain comprehensive insights into students’ perceptions of accounting careers. The quantitative component consisted of an online survey with 3,487 high school and college students across the United States, including substantial samples of Black/African American, Hispanic, AAPI, and White students. This survey tracked key metrics against baseline data from 2021 to 2022 and examined college and career decision journeys, accounting perceptions, barriers to entry, and messaging effectiveness across various educational levels. After this broad data collection, Edge Research conducted four virtual focus groups in January 2025 with high school students (divided between freshmen/sophomores and juniors/seniors) to explore these themes in greater depth. All focus group participants were college bound and open to business careers, with diverse representation across gender, region, and school types.

+++

<strong>About the Center for Audit Quality</strong>

The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility, and transparency of public company audits;</li>
 	<li>Advancing critical issues affecting public company audits;</li>
 	<li>Driving innovation in assurance; and</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

CAQ Releases Updated Research Exploring Key Trends in Accounting Career Pipeline

Press Releases

The Center for Audit Quality (CAQ) congratulates Chair Paul Atkins on his swearing-in to lead the U.S. Securities and Exchange Commission. Chair Atkins’ deep experience with the SEC and long-standing commitment to investor protection position him well to lead the...

<span data-contrast="auto">The Center for Audit Quality (CAQ) congratulates Chair Paul Atkins on his swearing-in to lead the U.S. Securities and Exchange Commission. Chair Atkins’ deep experience with the SEC and long-standing commitment to investor protection position him well to lead the Commission at a time of rapid change in the capital markets and corporate reporting.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:276}"> </span>

<span data-contrast="auto">The CAQ shares Chair Atkins’ belief in the critical role that independent assurance plays in fostering trust in our financial system.  We look forward to working with him and the full Commission to support policies that strengthen disclosures, elevate transparency, and advance the integrity and resilience of our capital markets.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:276}"> </span>

<span data-contrast="auto">“Strong capital markets depend on strong investor confidence — and investor confidence depends on the credibility of the information they rely on,” said Julie Bell Lindsay, CEO of the Center for Audit Quality. “We welcome Chair Atkins’ leadership and look forward to working together to advance thoughtful, forward-looking policymaking that recognizes the vital role of assurance in protecting investors and reinforcing the integrity of our markets.”</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:276}"> </span>

<span data-contrast="auto">+++</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:480}"> </span>

<b><span data-contrast="auto">About the Center for Audit Quality</span></b><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:240}"> </span>

<span data-contrast="auto">The CAQ champions the public interest in the capital markets by:</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:240}"> </span>
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="1" data-aria-level="1"><span data-contrast="auto">Elevating the quality, credibility, and transparency of public company audits;</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:240}"> </span></li>
</ul>
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="2" data-aria-level="1"><span data-contrast="auto">Advancing critical issues affecting public company audits;</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:240}"> </span></li>
</ul>
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">Driving innovation in assurance; and</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:240}"> </span></li>
</ul>
<ul>
 	<li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{&quot;335552541&quot;:1,&quot;335559685&quot;:720,&quot;335559991&quot;:360,&quot;469769226&quot;:&quot;Symbol&quot;,&quot;469769242&quot;:[8226],&quot;469777803&quot;:&quot;left&quot;,&quot;469777804&quot;:&quot;&quot;,&quot;469777815&quot;:&quot;hybridMultilevel&quot;}" aria-setsize="-1" data-aria-posinset="4" data-aria-level="1"><span data-contrast="auto">Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:240}"> </span></li>
</ul>
<span data-contrast="auto">As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559740&quot;:240}"> </span>

Statement on the Swearing-In of Paul Atkins as Chairman of the U.S. Securities and Exchange Commission

Statements

Company Management

SEC Regulations

AI governance rose on the list of issues committees are considering
NEW YORK, Feb. 12, 2025 — As digital threats continue to mount across industries, cybersecurity remains the top priority for audit committees at public companies, outside of financial reporting and...

<p style="text-align: center;"><em>AI governance rose on the list of issues committees are considering</em></p>
NEW YORK, Feb. 12, 2025 — As digital threats continue to mount across industries, cybersecurity remains the top priority for audit committees at public companies, outside of financial reporting and internal controls, according to survey findings released in the “<a href="http://www.thecaq.org/audit-committee-practices-report">Audit Committee Practices Report: Common Threads Across Audit Committees</a>,” a joint effort between Deloitte’s Center for Board Effectiveness and the Center for Audit Quality (CAQ).

On a broader scale, enterprise risk management (ERM), critical to achieving organizational objectives and safeguarding the company’s reputation and stakeholder relationships, is ranked as the second highest priority for audit committees. Finance and internal talent remain the third-highest priority for audit committees.

The report also shows how artificial intelligence (AI) governance is growing in importance as an audit committee consideration, reflective of the rapid adoption of transformative digital technologies that have ushered in a new era of business risk.

A total of 237 respondents participated in this year’s survey, primarily on boards of U.S. (89%) public (86%) companies with $2 billion or more in market cap (72%). Directors on boards of financial services companies made up 27% of the respondents.

<strong>Cybersecurity is the chief priority for audit committees</strong>
The survey found that 93% of respondents ranked cybersecurity as one of their top three priorities, with 50% ranking it as the leading priority for the audit committee. Further, 71% report cybersecurity is on their agenda on a quarterly basis. Cybersecurity has consistently been ranked as the top priority of audit committees in each of the four years the survey has been conducted, a clear indication that complex and evolving risk will continue to be a focus for audit committees in years to come.

"Cybersecurity remains atop audit committees’ agendas because the stakes have never been higher," said Vanessa Teitelbaum, senior director, Professional Practice, Center for Audit Quality. "With the increasing sophistication of cyber threats and the potential for significant financial, operational, and reputational harm, it’s critical for audit committees to stay ahead. Their continued focus and evolving expertise are essential to protecting organizations in this heightened risk environment."

<strong>Audit committee effectiveness remains a priority</strong>
In the current economic and geopolitical environment, the corporate reporting landscape is constantly evolving. When presented with various strategies to enhance audit committee effectiveness, more than two-thirds of respondents (69%) felt meetings might be improved by implementing one or more of the following strategies:
<ul>
 	<li>Forty percent of respondents want to improve the quality of presentations during meetings. This jumped from third last year to the top area of improvement this year.</li>
 	<li>Thirty-four percent of respondents want more engagement and discussion from committee members during meetings.</li>
 	<li>While most respondents feel that they have enough time to cover agenda items, some (12%) suggested they could use more time.</li>
</ul>
“As I work with audit committees, enhancing meeting effectiveness remains a top priority. In the face of new and evolving risks, the ability to better prioritize agendas, access comprehensive and timely information, and engage in open and candid discussions are critical factors that will drive efficiency and overall effectiveness,” said Krista Parsons, Audit &amp; Assurance managing director and Governance and Audit Committee Program leader, Center for Board Effectiveness.

<strong>Enhanced focus on AI governance</strong>
The survey also found an increased emphasis on understanding the impact and usage of AI technologies throughout the organization by the C-suite and board. The number of respondents who identified AI governance as a priority grew year over year, jumping to 35% from 20% last year. A growing portion of audit committees are taking on primary oversight of AI governance (up to 20% from 14% last year). Still, oversight mostly falls with the full board (58%).

Additionally, survey results suggest that work has been done to develop governance structures for AI oversight, with fewer respondents (6%) acknowledging they “don’t know” where AI oversight falls within their organization this year versus last year (17%). Amid ongoing conversations around how organizations govern AI, the question of who should be responsible for primary oversight continues to evolve.

<a href="http://www.thecaq.org/audit-committee-practices-report">Read the report</a>.

<strong>About the Survey</strong>
The fourth edition of the “Audit Committee Practices Report,” like prior editions, is based on a survey of audit committee members. A total of 237 respondents participated in this year’s survey, primarily on boards of U.S. (89%) public (86%) companies with $2 billion or more in market cap (72%). Those on boards of financial services companies made up 27% of respondents.

<strong>About the Center for Audit Quality</strong>
The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility and transparency of public company audits.</li>
 	<li>Advancing critical issues affecting public company audits.</li>
 	<li>Driving innovation in assurance.</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

<strong>About Deloitte’s Center for Board Effectiveness</strong>
Deloitte’s Center for Board Effectiveness helps directors deliver value to the organizations they serve through a portfolio of high-quality, innovative experiences throughout their tenure as board members. Whether an individual is aspiring to board participation or has extensive board experience, the Center’s programs enable them to contribute effectively and provide focus in the areas of governance and audit, strategy, risk, innovation, compensation and succession.

<strong>About Deloitte</strong>
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world’s most admired brands, including nearly 90% of the Fortune 500® and more than 8,500 U.S.-based private companies. At Deloitte, we strive to live our purpose of making an <a href="https://www2.deloitte.com/us/en/pages/about-deloitte/articles/purpose-at-deloitte-us.html">impact that matters</a> by creating trust and confidence in a more equitable society. We leverage our unique blend of business acumen, command of technology, and strategic technology alliances to advise our clients across industries as they <a href="https://www2.deloitte.com/us/en/pages/about-deloitte/articles/technology-consulting-engineering-advantage.html">build their future</a>. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Bringing more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte’s approximately 460,000 people worldwide connect for impact at <a href="http://www.deloitte.com/">www.deloitte.com</a>.

###

<strong>Contact</strong>

Kerry Lee
Public Relations
Deloitte Services LP
+1 916 298 8031
kerlee@deloitte.com

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Cybersecurity, Enterprise Risk Management, and Meeting Effectiveness Are Top Priorities for Audit Committees, According to Deloitte, Center for Audit Quality Survey

Investors

Cybersecurity

Washington, DC (November 18, 2024) – Today, the Center for Audit Quality (CAQ) and Ideagen Audit Analytics – an Ideagen Solution, released the 11th iteration of the annual Audit Committee Transparency Barometer Report. The report, which has been conducted annually...

<strong>Washington, DC (November 18, 2024) – </strong>Today, the Center for Audit Quality (CAQ) and Ideagen Audit Analytics – an Ideagen Solution, released the 11th iteration of the annual Audit Committee Transparency Barometer Report. The report, which has been conducted annually since 2014, analyzes audit committee disclosures of companies in the S&amp;P 1500.

Given audit committees face emerging risks and new areas of oversight responsibility, investors are interested in understanding the board’s composition and expertise. This years’ Barometer shows that disclosures related to expanded disclosure areas – particularly around audit committee oversight of and expertise in cybersecurity and ESG – have increased. Tracked for the first time, this year’s report also found that most boards are disclosing a skills matrix.

“The Transparency Barometer continues to provide insights into the deliberations of audit committees and how they exercise their expanding responsibilities,” said Michael Nohrden Vice President of Strategy for Ideagen. “It serves as an important tool for boards and the public to track and compare audit committee disclosures in the S&amp;P 1500.”

However, the report identifies several disclosure areas that have plateaued. These results demonstrate a continued opportunity for audit committees to enhance their disclosures on key matters to effectively tell their story.

“We continue to hear from investors that they would like more information – not boilerplate disclosures – around audit committees’ important responsibilities and processes,” said Julie Bell Lindsay, CEO, CAQ. “While we are pleased to see that audit committees are increasingly disclosing information about new oversight areas and their expertise, we hope they will take a fresh look and consider further enhancing their disclosures to ‘tell their story’ and the important work they do.”

Some key toplines of the report include:
<ul>
 	<li>The majority of S&amp;P 500 companies (85%) and S&amp;P midcap companies (75%) disclosed the board of directors’ skills matrix.</li>
 	<li>64% of S&amp;P 500 boards disclosed the audit committee is responsible for cybersecurity oversight while 34% of S&amp;P 500 boards disclosed the audit committee is responsible for oversight of ESG information.</li>
 	<li>60% of S&amp;P 500 boards disclosed they have a cybersecurity expert compared with 51% in 2023. ESG or sustainability expertise on the boards of S&amp;P 500 companies also increased by five percentage points since 2023 to 59%.</li>
 	<li>A plateau in disclosure rates was observed across several measures, including considerations in appointing or (re) appointing the external auditor, considerations of the length of tenure, and considerations around how the audit committee evaluates audit fees in relation to audit quality.</li>
</ul>
The full report is available to read <a href="https://www.thecaq.org/audit-committee-transparency-barometer">HERE</a>.

###

<strong>About the Center for Audit Quality</strong>

The CAQ champions the public interest in the capital markets by:
<ul>
 	<li>Elevating the quality, credibility, and transparency of public company audits;</li>
 	<li>Advancing critical issues affecting public company audits;</li>
 	<li>Driving innovation in assurance; and</li>
 	<li>Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.</li>
</ul>
As the voice of the public company audit profession, we work to instill trust in corporate reporting and the integrity of the auditing process, ultimately empowering investors, companies, and society as a whole.

<strong>About <u>Ideagen </u>Audit Analytics</strong><strong> – An Ideagen Solution</strong>

<u>Ideagen </u>Audit Analytics is an independent research provider that enables the accounting, legal, and investment communities to analyze auditor market intelligence, public company disclosure trends, and risk indicators. For more information, email <a href="mailto:info@auditanalytics.com">info@auditanalytics.com</a> or call 508-476-7007.

Annual Audit Committee Disclosure Barometer Finds Increase in Disclosure of Areas of Oversight and Expertise

The CAQ's Audit Partner Pulse Survey asks audit partners at leading US public company audit firms about their views on the current business environment in the United States. 
...

The CAQ's Audit Partner Pulse Survey asks audit partners at leading US public company audit firms about their views on the current business environment in the United States. 


Audit Partner Pulse Survey

Publications

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...

<img class="aligncenter wp-image-13848" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/2023_06_PPTA_HEADER.png" alt="Public Policy &amp; Technical Alert" width="600" height="150" />

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.
<h2>In This Issue</h2>
<img class="alignnone wp-image-13854" src="https://www.thecaq.org/wp-content/uploads/2023/06/PPTA_Section-Header_SEC.png" alt="SEC" width="350" height="44" />
<h3><strong>Crypto Task Force Roundtable on Financial Surveillance and Privacy Postponed</strong></h3>
The SEC <a href="https://www.sec.gov/newsroom/meetings-events/crypto-task-force-roundtable-financial-surveillance-privacy">announced</a> that its Crypto Task Force postponed its October 17, 2025, roundtable on financial surveillance and privacy. Due to a lapse in appropriations, this roundtable will be rescheduled for a later date.

<img class="alignnone wp-image-13853" src="https://www.thecaq.org/wp-content/uploads/2023/06/PPTA_Section-Header_PCAOB.png" alt="PCAOB" width="350" height="44" />
<h3><strong>PCAOB Publishes New Edition of <em>Data Points on Auditors of SPACs at IPO </em>and<em> Financial Statements and Auditor Turnover</em></strong></h3>
<ul>
 	<li>The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-publishes-new-edition-of-data-points-on-auditors-of-spacs-at-ipo">released</a> a new edition of <em>Data Points</em> in <em>Auditors of SPACs at IPO</em>. From January 2015 through August 2025, 1,291 special purpose acquisition company initial public offerings were listed on U.S. exchanges. At the time of their IPO, over 90% of these SPACs were audited by firms outside the six largest global accounting firm networks, with two such firms auditing more than 75% of these SPACs.</li>
 	<li>The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-publishes-new-edition-of-data-points-on-financial-restatements-and-auditor-turnover">released</a> a new edition of <em>Data Points: Financial Restatements and Auditor Turnover</em>.</li>
</ul>
<h3><strong>Board Member Stein to Host Forum in Los Angeles for Auditors of Small Businesses and Auditors of Broker-Dealers</strong></h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/board-member-stein-to-host-forum-in-los-angeles-for-auditors-of-small-businesses-and-auditors-of-broker-dealers">announced</a> that Board Member Kara M. Stein will host an in-person forum on auditing in the small business environment and on auditing broker-dealers on November 12, 2025. The one-day event – part of a series of 2025 forums – will take place in Los Angeles at Loyola Marymount University. There is no fee to attend the Los Angeles forum, but advance registration is required. A recording of the event will be made available on the PCAOB's website.
<h3><strong>PCAOB Concludes 2025 Conference on Auditing and Capital Markets</strong></h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-concludes-2025-conference-on-auditing-and-capital-markets">concluded</a> its 12th annual Conference on Auditing and Capital Markets on October 17, 2025. Research papers presented addressed:
<ul>
 	<li>Auditing and management disclosures</li>
 	<li>Private equity investment in accounting firms</li>
 	<li>The labor market for auditors</li>
 	<li>Auditor independence</li>
 	<li>The impact of regulation on non-capital market audits</li>
</ul>
The <a href="https://assets.pcaobus.org/pcaob-dev/docs/default-source/economicandriskanalysis/conference-2025/cacm/2025-cacm-agenda---v2-for-posting-9-15-2025.pdf?sfvrsn=cb5afd94_1">conference agenda</a> is available on the PCAOB website with links to the working papers.
<h3><strong>PCAOB Welcomes Global Partners to 17th International Institute on Audit Regulation</strong></h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-welcomes-global-partners-to-17th-international-institute-on-audit-regulation">concluded</a> its two-day 2025 International Institute on Audit Regulation, in Washington, D.C., on October 29, 2025. Under the theme of "A Firm's System of Quality Control: The Foundation of Audit Quality," the Institute included sessions with PCAOB Board Members and staff, leaders from non-U.S. regulatory bodies, and representatives from key stakeholder groups across auditing and financial reporting.
<h3><strong>PCAOB Holds November 5, 2025, Meeting of Its Standards and Emerging Issues Advisory Group</strong></h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-announces-agenda-for-november-5-meeting-of-its-standards-and-emerging-issues-advisory-group">held</a> a virtual meeting of its Standards and Emerging Issues Advisory Group on Wednesday, November 5, 2025, at 10:00 a.m. ET. A recording is available on the <a href="https://pcaobus.org/news-events/events/event-details/pcaob-standards-and-emerging-issues-advisory-group-meeting-november-2025">event page</a>.

<img class="alignnone wp-image-13849" src="https://www.thecaq.org/wp-content/uploads/2023/06/PPTA_Section-Header_AICPA.png" alt="AICPA" width="350" height="44" />
<h3><strong>Accounting Firms Report Strong Hiring Outlook, AICPA Report Finds</strong></h3>
The AICPA <a href="https://www.aicpa-cima.com/news/article/accounting-firms-report-strong-hiring-outlook-aicpa-report-finds">announced</a> the findings of its biennial report on trends related to accounting graduation rates, the CPA Exam and hiring demand by accounting firms. Accounting firms have a strong hiring outlook this year, with three-in-four of those that recruited new staffers in 2024 indicating plans to hire the same amount or more in 2025.

<img class="wp-image-13852 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/PPTA_Section-Header_International.png" alt="International" width="400" height="50" />
<h3><strong>Financial Reporting Council (FRC) Highlights Latest Trends in Accountancy and Audit</strong></h3>
The FRC <a href="https://www.frc.org.uk/news-and-events/news/2025/10/frc-highlights-latest-trends-in-accountancy-and-audit/">released</a> the 23rd edition of its Key Facts and Trends report, offering a comprehensive overview of the U.K. accountancy and audit landscape. The report shows continued growth in the accountancy profession, with membership increasing both in the United Kingdom and worldwide, though there was a minimal decline in student numbers. In the audit market, the report notes an ongoing trend of consolidation, with a decrease in the overall number of registered audit firms.
<h3><strong>FRC Publishes Key Findings and Good Practice Report</strong></h3>
The FRC <a href="https://www.frc.org.uk/news-and-events/news/2025/10/frc-publishes-key-findings-and-good-practice-report/">published</a> a report setting out the key findings and good practice the FRC has identified in the 2023-24 and 2024-25 inspection cycles related to the audits of the twelve largest audit firms.
<h3><strong>October 2025 International Accounting Standards Board (IASB) Agenda and Meeting Papers Now Available</strong></h3>
The International Financial Reporting Standards (IFRS) Foundation <a href="https://www.ifrs.org/news-and-events/calendar/2025/october/international-accounting-standards-board/">announced</a> that the agenda, papers, and meeting summary of the October 2025 IASB meeting are now available.
<h3><strong>Now Available: International Ethics Standards Board for Accountants (IESBA) Handbook 2025 Edition</strong></h3>
The IESBA <a href="https://www.ethicsboard.org/news-events/2025-10/now-available-iesba-handbook-2025-edition">released</a> the <em>2025 Handbook of the International Code of Ethics for Professional Accountants (including International Independence Standards)</em>. This handbook incorporates the tax planning pronouncement that became effective for tax planning services and activities beginning after June 30, 2025.
<h3><strong>IESBA Conference 2025 Videos and Speeches Now Available, Marking Global Ethics Day 2025</strong></h3>
The IESBA <a href="https://www.ethicsboard.org/news-events/2025-10/iesba-conference-2025-videos-and-speeches-now-available-marking-global-ethics-day-2025">announced</a> that all speeches and session videos from the IESBA Ethics and Independence Conference 2025 are now available on the conference website, offering open access to the key discussions and insights shared.
<h3><strong>International Organization of Securities Commissions (IOSCO) Reviews Implementation of Recommendations for Crypto and Digital Asset Markets</strong></h3>
The IOSCO <a href="https://www.iosco.org/news/pdf/IOSCONEWS774.pdf">published</a> its Final Report on its Thematic Review Assessing the Implementation of IOSCO Recommendations for Crypto and Digital Asset Markets. The review highlights both the progress made in regulating crypto-asset markets and the key areas for continued progress, such as promoting greater consistency in implementation, reducing risks of regulatory arbitrage, and strengthening enforcement practices.

<img class="wp-image-13850 alignnone" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/PPTA_Section-Header_CAQ.png" alt="CAQ" width="400" height="50" />
<h3><strong>External Auditor Assessment Webinar: Who, Why, What, When, and How</strong></h3>
The CAQ <a href="https://www.thecaq.org/event-external-auditor-assessment">announced</a> that Episode 8 of Audit Committee Effectiveness: A Webinar Series is scheduled for November 20, 2025. Audit committees should regularly (at least annually) evaluate the external auditor in fulfilling their duty in order to make an informed recommendation to the board whether to retain the external auditor. The webcast will offer a discussion from both sides of the aisle – audit committee members and the auditor – about how to effectively perform this assessment. The CAQ will discuss the just released 2025 update of the CAQ's External Auditor Assessment Tool for Audit Committees.
<h3><strong>External Auditor Assessment Tool: A Tool for Audit Committees</strong></h3>
The CAQ <a href="https://www.thecaq.org/external-auditor-assessment-tool-a-tool-for-audit-committees">shared</a> a new resource, External Auditor Assessment Tool: A Tool for Audit Committees. This assessment questionnaire is a tool audit committees can use to perform their evaluation of the external auditor. Sample questions are organized to help audit committees related to four specific areas:
<ul>
 	<li>quality of services and sufficiency of resources provided by the engagement team;</li>
 	<li>quality of services and sufficiency of resources provided by the audit firm;</li>
 	<li>communication and interaction with the external auditor; and</li>
 	<li>auditor independence, objectivity, and professional skepticism.</li>
</ul>
The publication covers what the evaluation should encompass.
<h3><strong>The Role of the Auditor in AI: Present &amp; Future</strong></h3>
The CAQ <a href="https://www.thecaq.org/rota-ai">published</a> "The Role of the Auditor in AI: Present &amp; Future," a publication that discusses how auditors can build on their existing expertise to bring increased trust and transparency to the use of artificial intelligence (AI) at public companies. The publication addresses:
<ul>
 	<li>The use of AI at public companies today, and the challenges associated with its use</li>
 	<li>How auditors are well-positioned to provide new assurance services on AI to help bridge the AI trust gap</li>
 	<li>Considerations and questions for boards to exercise their oversight of the company's use of AI</li>
</ul>
The CAQ also <a href="https://www.thecaq.org/aia-building-trust-in-ai">posted</a> an article written by Erin Cromwell, CPA, Senior Manager, Professional Practice, on why trust will be essential as public companies invest in artificial intelligence. Cromwell provides her key takeaways about how auditors' tried-and-true approach and evolving skillset supports this ever-changing landscape.
<h3><strong>Analysis of S&amp;P 500 Companies' 10-Ks</strong></h3>
The CAQ <a href="https://www.thecaq.org/sp500-companies-10k-analysis">analyzed</a> the most recent S&amp;P 500 company filings to better understand how public companies are addressing climate, AI, and digital asset-related information in their disclosures. These three resources provide a snapshot of what S&amp;P 500 companies typically disclose and where they disclose that information within the 10-K. This analysis looks at the most recent SEC Form 10-Ks for S&amp;P 500 companies available as of June 2025.
<h3><strong>The Role of the Auditor: Exercising and Maintaining Professional Skepticism</strong></h3>
A report by the Anti-Fraud Collaboration <a href="https://antifraudcollaboration.org/rota-fraud-exercising-and-maintaining-professional-skepticism/">explores</a> the importance of cultivating a questioning mindset and attitude, and using guides and scenarios to exercise professional skepticism effectively and understand the behavioral and environmental factors that can either support or hinder its effective use. Read the <a href="https://caqantifraprod.wpenginepowered.com/wp-content/uploads/2025/10/caq_afc_rota-exercising-and-maintaining-professional-skepticism_2025-10.pdf">full report</a>.

<strong> </strong>

<hr />

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 <a href="https://www.thecaq.org/">www.thecaq.org</a>.

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.

<em>Questions and comments about the Public Policy &amp; Technical Alert can be addressed to <a href="https://www.thecaq.org/about-us/our-people/donnie-heinerichs-cpa">Donnie Heinerichs</a>, Manager, Professional Practice (</em><a href="mailto:vteitelbaum@thecaq.org"><em>dheinerichs@thecaq.org</em></a><em>) or <a href="https://www.thecaq.org/about-us/our-people/annette-schumacher-cpa-cgma">Annette Schumacher</a>, Senior Director, Professional Practice (</em><a href="mailto:ashumacher@thecaq.org"><em>ashumacher@thecaq.org</em></a><em>).  </em>

Public Policy and Technical Alert | October 2025

Newsletter

PPTA

Welcome back, Audit Insiders!

It’s hard to believe we are two months away from the end of the year! As you’ve probably noticed, the pace of regulatory and technological change across the profession certainly hasn't slowed down. We are currently navigating...

<img class="aligncenter wp-image-13840" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_DM_WEBSITE-VERSION.png" alt="Audit Insider with Dennis McGowan" width="650" height="163" />

Welcome back, Audit Insiders!

It’s hard to believe we are two months away from the end of the year! As you’ve probably noticed, the pace of regulatory and technological change across the profession certainly hasn't slowed down. We are currently navigating a federal government shutdown while continuing to see key updates from the PCAOB and others.

Despite the challenges of the government shutdown, my colleagues and I remain focused on providing the clarity and technical perspective necessary to foster audit quality across the profession.

Read on for what I’m tracking.

<em>Please note that these perspectives are my own. If this email was forwarded to you, <a href="https://go.thecaq.org/l/834983/2020-04-22/fskb">subscribe </a>here so that you never miss a public company auditing update.</em>

<hr />

<img class="aligncenter wp-image-13839" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_DM_1200x400_600x200_WhatsNewinAudit.png" alt="What's new in public company audit" width="650" height="163" />
<h2>SEC</h2>
<h3><strong>SEC &amp; Reporting: The Quarterly Debate</strong></h3>
The conversation around the frequency of corporate financial reporting continues to be a central topic among U.S. policymakers. President Trump recently renewed his call for U.S. companies to report earnings semi-annually rather than quarterly. The SEC has since made this proposal a <a href="https://www.cnbc.com/2025/09/19/sec-to-propose-rule-change-on-trumps-call-to-end-quarterly-earnings-reporting-says-chair-atkins.html">priority</a>.

In a <a href="https://www.npr.org/2025/10/21/nx-s1-5577900/should-we-ditch-quarterly-earnings-reports">recent interview</a> with NPR’s<em> The Indicator from Planet Money</em>, our CEO, Julie Bell Lindsay, stated that the issue boils down to what reporting investors want. Here at the CAQ, we are closely following the discussion.

Regulatory stability is crucial for sustained investor confidence. The current government shutdown has, unfortunately, introduced a layer of uncertainty. We’ll continue to monitor the situation as it develops.
<h2>PCAOB</h2>
<h3><strong>PCAOB Publishes Staff Guidance on Audit Evidence</strong></h3>
Earlier this month, the PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-publishes-staff-guidance-providing-examples-of-the-application--of-paragraph-10a-of-as-1105--audit-evidence">published</a> new staff guidance to assist auditors in implementing Paragraph .10A of AS 1105, <em>Audit Evidence</em>. This guidance provides illustrative examples and should be read in conjunction with the new requirements in AS 1105 and <a href="https://assets.pcaobus.org/pcaob-dev/docs/default-source/rulemaking/docket-052/pcaob-release-no-2025-004.pdf?sfvrsn=b0eb83d5_2">Board Policy statement</a> on paragraph .10A. We welcome this guidance as a way the PCAOB can help audit firms as they prepare to apply the new requirements for evaluating the reliability of external electronic information provided by the company.
<h3><strong>PCAOB Releases Data Points on Auditors of SPACs and Financial Restatements and Auditor Turnover</strong></h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-publishes-new-edition-of-data-points-on-auditors-of-spacs-at-ipo">released</a> a new edition of its Data Points series: Auditors of SPACs at IPO. The data, covering January 2015 through August 2025, shows that over 90% of SPAC IPOs were audited by firms outside the six largest global accounting firm networks.

The PCAOB also <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-publishes-new-edition-of-data-points-on-financial-restatements-and-auditor-turnover">released</a> an edition of its Data Points series on Financial Restatements and <em>Auditor Turnover.</em> The data, from 2005 to 2024, shows that Big R restatements (those disclosed in an SEC Form 8-K, Item 4.02.) occurred at a rate of approximately 3% per year. On average, just under 30% of these restatements followed an auditor change in the previous year.
<h3><strong>SEC’s Draft Budget Proposal</strong></h3>
Due to the government shutdown, we are currently awaiting an official announcement regarding the PCAOB’s draft budget proposal,<a href="https://www.wsj.com/articles/pcaob-proposes-20-cut-to-board-pay-amid-sec-scrutiny-9de99b12?msockid=210e867c488260f806d893bb491b613f"> which could include a suggestion for salary cuts for Board members</a>. We will share an update once the PCAOB holds their open meeting to vote on their annual budget.​​
<h2>The Audit Effect: The Evolving Role of the Auditor</h2>
As investor demand evolves, so does the role of public company auditors. The CAQ is dedicated to providing resources to keep you up to date on trending topics in corporate reporting.
<h3><strong>WSJ Feature: Auditing Crypto’s Blind Spots </strong></h3>
The final article of our three-part series with the Wall Street Journal is a must-read! <em><a href="https://partnerswsj.com/caq-auditing-cryptos-blind-spots/p/1">Auditing Crypto’s Blind Spots</a></em> reinforces the auditor’s expanding role, moving the audit beyond the balance sheet into complex emerging areas like digital assets. While digital asset companies promise transparency through public ledgers, blockchain alone doesn't equal complete financial transparency.

As part of the <a href="https://www.thecaq.org/auditeffect?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_term=October">Audit Effect</a>, the CAQ champions the value of independent assurance, demonstrating how auditors use professional skepticism and technical expertise to uncover critical risks, such as poor private key management practices, that can compromise customer assets. <a href="https://partnerswsj.com/caq-auditing-cryptos-blind-spots/p/1">Read more</a> to see how auditors are uniquely positioned to provide assurance over this emerging area.

<img class="aligncenter wp-image-13838" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_DM_1200x400_600x200_FromtheCAQ.png" alt="From the CAQ" width="650" height="163" />
<h2>Audit Quality</h2>
Audit quality in the U.S. remains strong, but with new technologies, evolving regulatory priorities, and shifting market risks, staying ahead requires continuous attention. The CAQ is actively engaging with stakeholders, providing resources, and leading conversations to help practitioners navigate these changes. Read on for recent news, tools, and upcoming events shaping the profession.
<h3><strong>AFC Newsletter</strong></h3>
The Anti-Fraud Collaboration has released its latest quarterly newsletter, sharing recent resources and offering insights into emerging fraud risks. Read the latest issue <a href="https://antifraudcollaboration.org/afc-newsletter-october-2025/">here</a> and visit the <a href="https://antifraudcollaboration.org/">Anti-Fraud Collaboration website</a> to subscribe for future updates.
<h3><strong>The Role of the Auditor in AI: Present and Future </strong></h3>
As companies integrate AI into their workstreams, investors understandably have concerns over the usage of this advanced tool.

Our newest <a href="https://www.thecaq.org/rota-ai?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_term=October">publication</a> explores how auditors are uniquely positioned to bring trust and transparency to the use of AI at public companies. For companies to gain the full benefit from their AI investments, trust is a critical factor. This is because internal and external stakeholders need assurance; they must have confidence in the reliability, transparency, security, and integrity of those AI systems before they rely on them.

Auditors apply their existing expertise to provide assurance services that help meet this growing need, effectively maximizing the benefits and realizing the potential of these crucial investments.

In an <a href="https://www.thecaq.org/aia-building-trust-in-ai?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_term=October">Audit in Action blog</a>, my colleague, Erin Cromwell, Senior Manager of Professional Practice, spotlights how auditors are more than prepared to implement essential oversight. Read on for Erin’s takeaways and her perspective on the challenges associated with AI and how management can play a role in enhancing investors’ confidence.
<h3><strong>Explore Our Updated External Auditor Assessment Tool</strong></h3>
Earlier this month, the CAQ released our updated <a href="https://www.thecaq.org/external-auditor-assessment-tool-a-tool-for-audit-committees?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_term=October">External Auditor Assessment Tool</a>. This unique resource is designed to guide audit committees in assessing the qualifications and performance of their external auditor. Audit committees have the direct responsibility to oversee the external auditor and should perform this evaluation regularly (at least annually) to make an informed recommendation to the board regarding retention. The assessment questionnaire focuses on four key areas: the quality and sufficiency of resources provided by the engagement team; the quality and sufficiency of resources provided by the audit firm as a whole; the quality of communication and interaction; and the vital assessment of auditor independence, objectivity, and professional skepticism.

The CAQ is committed to providing tools that facilitate this robust, two-way dialogue between the committee and the external auditor. We’ll continue to share resources as they are developed.

<img class="aligncenter wp-image-14537" src="https://www.thecaq.org/wp-content/uploads/2024/03/Header_DM_1200x400_600x200_This-Months-AI-1024x256.png" alt="" width="650" height="163" />
<h3><strong>Spotlight on Cybersecurity Assurance</strong></h3>
This month, I sat down with Todd Bialick, PwC US Digital Assurance and Transparency Leader, to discuss the rising need for auditor expertise in evaluating cybersecurity information. Read on for Todd’s takeaways.

<em>How does auditor expertise and rigor make the profession uniquely qualified to assure cybersecurity information as investor demand increases?</em>

The long-standing foundation of independence, accountability, and professional rigor that auditors apply to financial reporting can now support their work relating to cybersecurity information. By applying proven principles of independence, accountability, and transparency, auditors can help companies bring credibility to the cybersecurity information they provide, so investors can move forward with confidence.

<em>In an evolving digital world, how do you think the role of the auditor has changed?</em>

As companies embrace cloud, automation, and AI, the risk landscape has shifted dramatically. Cyber threats can pose increasing risks to business performance and market confidence. In light of the growing complexity of digital threats, auditors have continued to proactively refine their approaches to respond to these risks with a particular focus on the impact on financial reporting and disclosures, including Internal Control over Financial Reporting (ICFR).

<em>In your opinion, what is the advantage of having a multidisciplinary expertise? </em>

The world is changing, and the financial reporting profession is being asked to go beyond our traditional field of expertise. In response, audit firms are bringing together professionals with deep knowledge of financial reporting and operational controls, along with cybersecurity specialists who understand threat landscapes and risk management. This collaboration can enable a comprehensive approach to planning and delivering audit and attest engagements.

<em>How do CPAs maintain independence and professional rigor when evaluating cybersecurity information?</em>

As we both know, CPAs operate with independence and adhere to strict professional standards. Their evidence-based approach, grounded in objectivity and professional skepticism, equips them to evaluate cybersecurity information and management’s processes and controls. Through this approach, stakeholders and investors can be assured that the information provided is reliable and accurate.

<img class="aligncenter wp-image-13977" src="https://www.thecaq.org/wp-content/uploads/2023/06/Header_DM_1200x400_600x200_Additional_V2.png" alt="Additional Resources and Events" width="650" height="163" />
<h3><strong>CAQ at the Axios BFD Summit </strong></h3>
Our CEO, Julie Bell Lindsay, will be a part of the upcoming <a href="https://axiosbfdsummitnewyork2025.splashthat.com/?lid=v7q03ena8tnu">Axios Summit</a> on Tuesday, November 18, in New York City. The summit will spotlight the power players behind the year’s biggest deals in tech, finance, and M&amp;A. The conversations, led by Axios business editor Dan Primack, focus on the strategies shaping valuations and the future of dealmaking. Stay tuned for our takeaways!
<h3><strong>Register for the External Auditor Assessment Tool Webinar</strong></h3>
Join us on November 20th for this virtual webinar, in partnership with the National Association of Corporate Directors (NACD). My colleague, Vanessa Teitelbaum, Senior Director, Professional Practice will moderate a discussion with Mike Seelig and Stephen Parker. The event will focus on the updated External Auditor Assessment Tool, which is used by audit committees to fulfill their duty of evaluating the external auditor's qualifications and performance. I hope to see you there! <a href="https://www.thecaq.org/event-external-auditor-assessment?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_term=October">Register here.</a>

&nbsp;

<hr />

<h3 style="text-align: center;"><em>Dennis McGowan</em></h3>
<p style="text-align: center;"><em>Vice President, Professional Practice and Anti-Fraud Initiatives </em></p>

Audit Insider | October 2025

In periods of uncertainty and change, the consistent application of professional skepticism remains a cornerstone of audit quality. As fraud risks evolve and financial reporting challenges grow more nuanced, it remains necessary for auditors to maintain a questioning mindset throughout...

In periods of uncertainty and change, the consistent application of professional skepticism remains a cornerstone of audit quality. As fraud risks evolve and financial reporting challenges grow more nuanced, it remains necessary for auditors to maintain a questioning mindset throughout all phases of the audit. While auditing standards mandate the exercise of professional skepticism, its application is inherently judgment-based and situational. This publication explores the importance of cultivating a questioning mindset and attitude, and using guides and scenarios to exercise professional skepticism effectively and understand the behavioral and environmental factors that can either support or hinder its effective use.

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