September 30, 2016

CAQ Snapshot: September 2016

Robust Investor Confidence on Display in CAQ's Latest Main Street Investor Survey

Seventy-nine percent of American investors are confident in U.S. capital markets, and 81 percent have confidence investing in U.S. publicly traded companies, according to the CAQ's 10th Annual Main Street Investor Survey: A Decade of Investor Confidence. The survey also found that 57 percent of investors think the next U.S. president will significantly impact their investment decisions.

“With 10 years of data, the Main Street Investor Survey provides a sweeping view of the strength and resilience of U.S. investors and the robust confidence they place in our capital markets system," said CAQ Executive Director Cindy Fornelli in a press release accompanying the report's publication.

Investors showed healthy levels of confidence in public company auditors (81 percent), independent audit committees (77 percent), audited financial statements (75 percent), and financial advisors (75 percent). Respondents also named growing national debt, global political unrest, cybersecurity threats to personal information and the capital markets, and a possible terrorist attack on the United States as the greatest risks to the U.S. economy.

CAQ and AICPA Address Auditor's Role in Meeting Growing Cybersecurity Needs

The auditing profession is in a strong position to play an important role in fostering instructive conversations about cybersecurity risk management, explains the CAQ in a new publication, Social Contract 3.0: Implementing a Market-Based Model for Cybersecurity. Published by the Internet Security AllianceSocial Contract 3.0 provides wide-ranging perspectives and recommendations from numerous industries and professions across the private sector and policy spectrum; the book is targeted particularly to leadership of the incoming U.S. administration.

“Given its prominence for investors and markets, cybersecurity has been a top priority for the Center for Audit Quality,” said the CAQ's Fornelli in a September 15 press release highlighting the Social Contract 3.0. "Auditors can expand their role in accordance with time-tested assurance frameworks, thus bringing the profession's many strengths to bear on today's cybersecurity challenges."

In related cybersecurity news, the American Institute of CPAs (AICPA) is seeking public comment on two exposure draftsreleased by its Assurance Services Executive Committee. The exposure drafts will pave the way for a common language for a strategic, objectives-based approach to cyber risk management that can be used to assist boards of directors, senior management, and other pertinent stakeholders as they evaluate the effectiveness of an entity’s cybersecurity risk management program. To encourage input from key stakeholders, the CAQ has produced a new resourceproviding an overview of the exposure drafts, as well as directions on how to submit comments.

For more on the auditor's role in cybersecurity, visit the related resource pages from the AICPA and the CAQ.

#AuditorProud Social Media Blitz Encourages Youth to Explore Careers in Audit, Celebrates Profession

On September 22, the Center for Audit Quality (CAQ) and its members led a second annual social media "blitz" highlighting the benefits of a career in auditing and the important role auditors play in capital markets. Using #AuditorProud, individuals and organizations posted thousands of messages, pictures, and videos about what a career in auditing can offer. Shared across social networks, these messages reached a potential audience of nearly 71 million people across the globe.

“Auditor Proud day gives us the opportunity to showcase the audit profession as an exciting and rewarding career path,” said Deloitte LLP CEO and CAQ Governing Board Chair Cathy Engelbert in a statement. “In this time of rapid change, the audit profession is embracing and leveraging the latest in technology. We’re recruiting a new class of auditors armed with the skills to meet the evolving needs of investors and the marketplace.”


"CAQ staffers show they are #AuditorProud"

“Auditors play a crucial role in our capital markets by providing investors with important information about company finances," added the CAQ's Fornelli. "The profession is committed to finding innovative ways to attract the best and brightest to continue to serve investors and the markets.”

For more on the blitz, including an interactive chart of #AuditorProud tweets worldwide, visit www.DiscoverAudit.org. The site also features resources for students, educators, parents, and others interested in learning more about a career in public company auditing and the many reasons to Discover Audit

CAQ and CII Join Forces for Comment Letter Regarding Accelerated Filer Definition

In a joint letter filed with the Securities and Exchange Commission (SEC) in late August, the CAQ and the Council of Institutional Investors (CII) expressed the two organizations' strong support for maintaining the current accelerated filer public float threshold. Filed in response to the SEC's proposal, Amendments to Smaller Reporting Company Definition, the letter also registers opposition to any amendments that would erode Section 404(b) of the Sarbanes-Oxley Act or increase the accelerated filer public float threshold. The CAQ and CII believe that any amendment that erodes Section 404(b) would substantially impact the quality of financial reporting by public companies to the detriment of investors and our capital markets more generally.

"Profession in Focus" Features U. of Wisconsin's Johnstone, PwC's Moats

In September, the CAQ added two new episodes to its "Profession in Focus" video series. The first features Karla Johnstone, EY Professor in Accounting at the University of Wisconsin – Madison School of Business. Johnstone discusses the top challenges facing the public company auditing profession, including coordinating and communicating around internal control over financial reporting, as well as attracting the best and brightest to the profession. She also shares views on how she teaches professional skepticism to today's tech-savvy students.

In the subsequent episode, Maria Castañón Moats, US Assurance Leader of PwC, discusses the importance of inclusion for talent retention, the auditor's role in cybersecurity, and the role of technology in an evolving auditing profession. "We need to change the way we deliver our services," says Moats, who discusses PwC's efforts to "simplify the audit through innovation."