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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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Thomas Makenzie

KPMG US and Global Audit Chief Technology Officer 

AI and GenAI are transforming the landscape of financial reporting, driving innovation and improvements in quality and efficiency. In the next three years, 100% of US financial reporting leaders report they will be either piloting or using AI in financial...

AI and GenAI are transforming the landscape of financial reporting, driving innovation and improvements in quality and efficiency. In the next three years, 100% of US financial reporting leaders report they will be either piloting or using AI in financial reporting, according to a recent KPMG <a href="https://kpmg.com/us/en/media/news/ai-in-financial-reporting-kpmg-2024.html">survey on AI in financial reporting</a>.

As companies engage more with AI and GenAI capabilities in this 'AI era,' they will face new opportunities, risks and challenges. Financial reporting leaders are focused on navigating these risks by becoming AI-ready and expect their external auditor to not only use AI and GenAI in the audit, but also use professional judgement to evaluate control environments.

In fact, 83% of financial reporting leaders believe it is important for auditors to utilize AI in performing their analysis, prioritizing risk and anomaly identification, data analysis and quality management, and risk mitigation and real-time auditing.
<h3><strong>Enhancing audit quality with AI </strong></h3>
At KPMG, we are accelerating our use of AI in the audit, anchored by our Trusted AI framework, to continue enhancing quality and uncovering deeper insights for audit committees and management.

Last year, we deployed KPMG Audit Chat, our proprietary GenAI tool built on Azure OpenAI service, which includes a library of use cases. Audit Chat now <a href="https://kpmg.com/us/en/media/news/kpmg-audit-chat-new-capabilities-2024.html">helps auditors consult our methodology and the standards, review documentation and more</a>.

Today, we’ve <a href="https://kpmg.com/us/en/media/news/kpmg-ai-integration-clara-2024.html">embedded our GenAI assistant directly into KPMG Clara</a>, our global smart audit platform, for 90,000 auditors around the globe. Like an additional team member, this capability can interact directly with audit engagement documentation and our audit methodology to help auditors refine risk assessments, develop substantive testing procedures and enhance audit documentation.

Additionally, we are using directed AI and machine learning to conduct transaction scoring through our global alliance with MindBridge. With KPMG Clara Transaction Scoring, our teams are able to perform analyses over 100% of transactional populations, delivering audit evidence and identifying outliers over both general ledger and subledger populations. Transaction Scoring also enables our teams to refine risk assessments and unlock deeper, data-driven insights for audit committees and management teams.

AI is freeing up resources for our auditors to spend more time on the areas of highest risk, sector-specific risks and challenges – to the benefit of both stakeholders and the capital markets.

[custom_quote text="AI is freeing up resources for our auditors to spend more time on the areas of highest risk, sector-specific risks and challenges."]
<h3><strong>Protecting the capital markets with trust</strong></h3>
Our focus areas align with the demands of audit committees and management teams. Our research finds that companies across the US are eager to realize the benefits of an AI-enabled financial reporting process.

Among financial reporting leaders, the top expected benefits of AI in the next three years include real-time insights into risks, fraud and control weaknesses (73%), increased data accuracy and reliability (67%) and lower costs (62%). In addition, 60% expect greater ability to predict trends and impacts.

Importantly, our Trusted AI approach ensures we are deploying AI in the audit with a human-in-the-loop mindset to maintain quality and accuracy. Our teams are trained on how to effectively use AI as an enabler, ensuring our professionals are critically engaging outputs and exercising professional skepticism.
<h3><strong>Empowering our professionals with AI </strong></h3>
AI will augment, not replace, the role of the auditor, and the audit will always be people-driven. Our methodology, audit standards, industry dynamics and a business’s particular risks are integrated through human judgment and decision.

We believe AI will pull more people into the profession. By reducing manual work, people are free to focus on more strategic, higher-level thinking. Moreover, as the role of the auditor expands to protect the capital markets, the mission and purpose that drives our profession today will only increase.

[custom_quote text="AI will augment, not replace, the role of the auditor, and the audit will always be people-driven."]
<h3><strong>Looking ahead </strong></h3>
The use of AI and GenAI is becoming ubiquitous, with 58% of financial reporting leaders seeing GenAI as the number one technology priority in the next year.

At KPMG, where we are today is just the tip of the iceberg. As our technology teams and auditors gain more experience with GenAI, we expect to accelerate innovation across our audits.

More broadly, the benefits of AI will only grow as firms continue investing in and deploying new capabilities, and in the future, these trends will fundamentally shape the competitive positioning of finance functions in business strategy. At the same time, auditors will have the opportunity to become consistent collaborators with organizations as they embrace AI as a business enabler and navigate the increasingly dynamic, digitally connected market.

Transforming the audit experience with AI

Emerging Reporting Areas

Blog Post

Vice President, Professional Practice and Anti-Fraud Initiatives

Dennis J. McGowan, CPA is the Vice President, Professional Practice and Anti-Fraud Initiatives at the Center for Audit Quality. In this role he leads regulatory and policy strategies that foster high-quality performance by public company auditors.

His duties include leading a team of audit executives to advance technical and policy-oriented projects to identify, develop, and seek consensus on issues affecting the public company auditing profession. McGowan is also responsible for overseeing the CAQ’s anti-fraud initiatives. This includes engaging with senior leaders across the financial reporting ecosystem, drafting comment letter responses to regulators, developing thought leadership publications, and responding to technical inquiries.

Dennis serves as a Board Member of Annapolis Pride, an organization dedicated to celebrating the LGBTQ+ community in Annapolis. Before joining the CAQ, he spent a decade at PwC, where he specialized in auditing clients in the financial services industry.

Dennis is a Certified Public Accountant licensed in Pennsylvania, and he holds a BS in Business Administration from La Salle University.

Dennis McGowan, CPA

In light of ongoing discussions around the critical audit matters (CAMs) communicated in PCAOB audit reports, the CAQ sought to better understand investors' understanding and use of CAMs. The results, institutional investors surveyed regularly use CAMs in their decision-making processes.
The...

In light of ongoing discussions around the critical audit matters (CAMs) communicated in PCAOB audit reports, <a href="http://thecaq.org/critical-audit-matters-survey-research-findings-q3-survey">the CAQ sought to better understand</a> investors' understanding and use of CAMs. The results, institutional investors surveyed regularly use CAMs in their decision-making processes.
<h3><strong>The Big Picture:</strong> <strong>What Are Critical Audit Matters (CAMs)?</strong></h3>
Taking a step back, CAMs are by definition any matter arising from the audit of the financial statements that was communicated or required to be communicated to the audit committee. The matter must also be one that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex auditor judgment. CAMs enable auditors to communicate in their auditor’s report those matters that were especially challenging, subjective, or complex during the audit of a company’s financial statements.

Communicating CAMs in the auditor’s report enables auditors to communicate directly with the user of the report, and can bridge the information gap between auditors and investors, providing investors with more information about the audit, likely in areas that would be of particular interest to them.

[custom_quote text="CAMs enable auditors to communicate in their auditor’s report those matters that were especially challenging, subjective, or complex during the audit of a company’s financial statements."]
<h3><strong>Zooming In: Investors’ Use of CAMs:</strong></h3>
After five years of auditor reporting that includes CAMs, there is some debate over the success of the new model, but <a href="https://www.thecaq.org/critical-audit-matters-survey-research-findings-q3-survey">recent CAQ research</a> appears to indicate that some benefits have been achieved.

Our survey found that investor respondents had strong positive feedback regarding CAMs.
<ul>
 	<li>Nearly all (93%) investors surveyed indicated that they read the CAMs section in 10-Ks of companies they invest in or are researching, and 78% indicated that they do so often.</li>
 	<li>92% of respondents indicated that they use CAMs in their investment decision-making process</li>
 	<li>93% said that, considering all the sources of information available to them, CAMs play a very important (53%) or somewhat important (40%) role in their analysis of potential investments.</li>
 	<li>Additionally, nine in ten investors stated that they are very satisfied (48%) or somewhat satisfied (42%) with the quality and clarity of CAMs disclosed in most audit reports, with only 2% of respondents expressing dissatisfaction.</li>
</ul>
Of the small number that expressed dissatisfaction with the quality and clarity of CAMs, they indicated that the language used to describe CAMs is not clear or overly complicated.

While satisfaction levels were high according to the survey, investor respondents did have some suggestions for ways in which CAMs could be improved.

More than half (58%) of investors surveyed indicated that they prefer to see more CAMs identified in an auditor’s report; and when asked what changes to CAMs would benefit their investment decisions, approximately half of respondents shared that both increasing the number of CAMs (52%) and increasing the detail provided in CAMs (51%) would be beneficial. Twenty-five percent of respondents also felt that requiring CAMs related to specific audit areas would be advantageous, but there was no consensus regarding the specific areas in which required subject matter specific CAMs were desired.

When asked to rank which information related to CAMs respondents do or would find most important to their investment decisions, the most selected responses were the inherent risk associated with the CAM (50% of respondents ranked as 1 or 2) and the topic/area of the CAM (46% of respondents ranked as 1 or 2). This feedback was interesting, as the topic area of the CAM is something that is currently required to be disclosed, but the inherent risk associated with the CAM is not required and is not frequently included in auditor’s reports today.

The results of our survey suggest that CAMs are understood and provide value to investors. As one investor wrote, “I find audit transparency critical to assessing a company’s financial health. CAMs can reveal the most complex or judgmental areas of an audit, which helps me identify potential risk points.”

While CAMs will continue to evolve to meet investors’ information needs, it is gratifying to see evidence that the efforts of standard setters and auditors to increase transparency around the audit process with the communication of CAMs is benefiting the capital markets.

[custom_quote text="I find audit transparency critical to assessing a company’s financial health. CAMs can reveal the most complex or judgmental areas of an audit, which helps me identify potential risk points."]
<h3></h3>

Unveiling the Value of Critical Audit Matters (CAMs) for Investors

Auditors

Audit Quality

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Sproul, Becky 2020 (1)

Becky Sproul

Talent and Culture Officer – Audit, KPMG US

I’m Becky Sproul, Audit Talent and Culture Officer at KPMG US and I’m sharing how my background has shaped who I am today, personally and professionally. Hispanic Heritage Month is a time to celebrate the achievements and contributions of Hispanic...

I’m Becky Sproul, Audit Talent and Culture Officer at KPMG US and I’m sharing how my background has shaped who I am today, personally and professionally. Hispanic Heritage Month is a time to celebrate the achievements and contributions of Hispanic and Latino Americans while reflecting on the profound impact of our diverse backgrounds. As a first-generation Cuban American, I am grateful for my family's support in shaping the leader I am today, instilling me with strong values and fueling my passion for diversity and inclusion.
<h3><strong>Shaping leadership through family support
</strong></h3>
My cultural background has significantly influenced my educational and career journey, grounding me in the values of hard work, perseverance and family support. These values have been instrumental in my accounting career, where attention to detail is crucial for precision and accuracy. Moreover, my family's strong work ethic and the emphasis on integrity have become essential qualities in my professional life.

These factors have driven me to pursue higher education and excel in my accounting career, while also instilling in me a deep sense of responsibility to give back and create opportunities for others.

[custom_quote text="My family's strong work ethic and the emphasis on integrity have become essential qualities in my professional life."]
<h3><strong>Giving back to the Hispanic community
</strong></h3>
<img class=" wp-image-15450 alignright" src="https://www.thecaq.org/wp-content/uploads/2024/09/2024_09_AiA_Becky-Sproul.png" alt="" width="300" height="188" />In my accounting career, I have actively given back to the Hispanic community. I serve as an audit committee member for the United Way of Miami-Dade and as a board member of The PhD Project. I am also a member of the Business Dean’s Council at Florida International University. Through these roles, I am able to leverage my accounting skills to support organizations dedicated to serving and uplifting the Hispanic community.

I have experienced several proud moments in my career that have brought me immense joy. Being featured on ALPFA Inc's Latinas to Watch List has highlighted the impact I have made as a Latina professional. Additionally, my active involvement in the Hispanic/Latino Network (Somos KPMG) and the KPMG Network of Women has allowed me to contribute to the advancement and empowerment of diverse professionals. This reinforces the importance of representation and leadership within the Hispanic community.

[custom_quote text="Being featured on ALPFA Inc's Latinas to Watch List has highlighted the impact I have made as a Latina professional."]
<h3><strong>Overcoming challenges
</strong></h3>
Although I have achieved career success through conventional means, I have encountered challenges in balancing my cultural identity with the expectations and norms of a corporate environment. In addition, I found that at certain stages of my career, there was a lack of representation and role models that shared my background. However, through determination and perseverance, I have overcome biases and demonstrated my capabilities. These experiences have taught me the significance of resilience and self-advocacy in attaining success.

During Hispanic Heritage Month, let's embrace diversity in our communities and workplaces, working together to create a more inclusive and equitable society. Let's uplift and empower one another, celebrating the achievements and contributions of Hispanic and Latino Americans every day, not just during this month.

[custom_quote text="Let's embrace diversity in our communities and workplaces, working together to create a more inclusive and equitable society."]

Celebrating Hispanic Heritage Month: Embracing Diversity, Leadership and Community

Hosted by Julie Bell Lindsay, CEO of the Center for Audit Quality, Capital Markets Pulse dives into the latest key matters related to the capital markets featuring experts from across the corporate reporting world.

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Hosted by Julie Bell Lindsay, CEO of the Center for Audit Quality, Capital Markets Pulse dives into the latest key matters related to the capital markets featuring experts from across the corporate reporting world.

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Podcast | Capital Markets Pulse, Episode 9: Paul Munter

Policymakers

Investors

Podcast

Hosted by Julie Bell Lindsay, CEO of the Center for Audit Quality, Capital Markets Pulse dives into the latest key matters related to the capital markets featuring experts from across the corporate reporting world.

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Podcast | Capital Markets Pulse, Episode 8: Richard Jackson

Audit Committee Effectiveness: A Webinar Series | Episode 7
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...

<h4>Audit Committee Effectiveness: A Webinar Series | Episode 7</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

Audit Committee

Webinar

Event

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 join the live webcast.</em>

Audit Insider Webinar | October 2024

Audit Committee Effectiveness: A Webinar Series | Episode 6
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...

<h4>Audit Committee Effectiveness: A Webinar Series | Episode 6</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" />

Enterprise Risk Management (ERM) is essential for audit committee members, offering insights into identifying, assessing, and mitigating risks that impact organizational objectives. Join the CAQ, NACD and our panel of experts for a discussion on how audit committees can fulfill their oversight responsibilities related to ERM through the lens of frameworks, regulatory expectations, and best practices for effective risk oversight. Participants will learn how to enhance risk reporting, improve decision-making, and ensure alignment with strategic goals.

<em><strong>Note</strong>: CPE available only to participants who joined the live webcast.</em>

Enterprise Risk Management for Audit Committees

This hour-long webcast will showcase regulatory and practice developments of interest to public companies and their auditors. Panelists include staff from the SEC’s Division of Corporation Finance and the SEC’s Office of the Advocate for Small Business Capital Formation. Panelists...

This hour-long webcast will showcase regulatory and practice developments of interest to public companies and their auditors. Panelists include staff from the SEC’s Division of Corporation Finance and the SEC’s Office of the Advocate for Small Business Capital Formation. Panelists will discuss comments issued on SEC filings and lessons learned from the 2023 reporting cycle. Panelists will also discuss the role of the Office of the Advocate for Small Business Capital Formation, including the resources they offer small businesses and the firms that serve them.

<em><strong>Note</strong>: CPE available only to participants who joined the live webcast.</em>

Audit Insider Webinar | July 2024

Audit Committee Effectiveness: A Webinar Series | Episode 5
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...

<h4>Audit Committee Effectiveness: A Webinar Series | Episode 5</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 <a href="https://www.thecaq.org/audit-committee-practices-report-2024">third edition of the Audit Committee Practices Report</a>, 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>: CPE available only to participants who joined the live webcast.</em>

2024 Audit Committee Practices Report Webinar

Washington DC, September 26, 2024 – Kathleen Casey, Senior Advisor at Patomak Global Partners, a leading strategy, risk management, and compliance consultancy, joined the CAQ's Governing Board, effective September 26, 2024.

Casey brings decades of financial policy experience, previously serving as...

<strong>Washington DC, September 26, 2024</strong> – Kathleen Casey, Senior Advisor at Patomak Global Partners, a leading strategy, risk management, and compliance consultancy, joined the CAQ's Governing Board, effective September 26, 2024.

Casey brings decades of financial policy experience, previously serving as an SEC Commissioner from 2006 to 2011, where she acted as the SEC’s principal representative in multilateral and bilateral regulatory dialogues, the G-20 Financial Stability Board, and the International Organization of Securities Commissions (IOSCO). Casey focuses on financial markets policy, regulatory compliance and risk management, corporate governance, international regulatory developments, and enforcement in her current role.

“We’re pleased to welcome Kathy to the Board,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “Her financial policy expertise will be invaluable to the CAQ and the public company audit profession as we navigate new standards and regulations that are arising as a result of the evolving corporate reporting landscape.”

“I’m pleased to join CAQ’s Governing Board and support their important efforts to advance the CAQ’s public interest objectives of enhancing the quality, credibility and transparency of public company audits,” said Casey. “I look forward to working with the Board to address topics vital to audit quality and the future of the profession."

The CAQ’s Governing Board is comprised of a variety of leaders representing the financial reporting ecosystem, including chief executive officers from some of the largest public company audit firms, the American Institute of CPAs, as well as independent board members from stakeholder communities.

+++

<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>Contact:</strong>
Brad Jacklin
Director of Communications
Bjacklin@thecaq.org
(202)-494-9560

Patomak Global Partners’ Kathleen Casey Joins CAQ Governing Board

Press Releases

Washington DC, June 17, 2024 – The CAQ Governing Board elected Brian Becker, Managing Partner and CEO, RSM US LLP (RSM), as the new Vice Chairman of the Governing Board, effective June 14, 2024.

Becker oversees the firm’s strategy and operations...

<strong>Washington DC</strong>, <strong>June 17, 2024</strong> – The CAQ Governing Board elected Brian Becker, Managing Partner and CEO, RSM US LLP (RSM), as the new Vice Chairman of the Governing Board, effective June 14, 2024.

Becker oversees the firm’s strategy and operations across four countries—the United States, Canada, El Salvador and India. Becker is driving RSM to become a digital firm and is committed to advancing the firm’s inclusive culture, as well as to continuing its longstanding history of stewardship.

“With his extensive experience and long-standing dedication to the profession, Brian will be essential to the CAQ as we work to instill trust in corporate reporting and the integrity of the auditing process,” said Julie Bell Lindsay, Chief Executive Officer, Center for Audit Quality.

“In this time of accelerating change for the auditing profession, the CAQ’s mission of enhancing trust and transparency is more important than ever,” said Becker. “I look forward to continuing to serve on the Board in the role of Vice Chair as we address the challenges and opportunities that lie ahead.”

Becker succeeds Wayne Berson, Chief Executive Officer, BDO USA and Chairman, BDO International. “I also want to extend our gratitude to Wayne for his time and energy as Vice Chair of our Governing Board since 2019. With his vision and leadership, Wayne has been an essential driver of our goals and commitment to strengthening the work of public company auditors,” said Lindsay.

The CAQ’s Governing Board is comprised of a variety of leaders representing the financial reporting ecosystem, including chief executive officers from some of the largest public company audit firms, the American Institute of CPAs, as well as independent board members from investor, board member and issuer communities.

<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>Contact:</strong>
Brad Jacklin
Director of Communications
Bjacklin@thecaq.org
(202)-494-9560

RSM CEO Brian Becker Elected as New Vice Chair of CAQ Governing Board

Preparers/Issuers

Company Management

Washington DC, April 2, 2024 – Paul Knopp, KPMG U.S. Chair and CEO, has been elected Chair of the CAQ’s Governing Board, effective April 1, 2024.

The CAQ’s Governing Board is comprised of a variety of leaders representing the financial reporting...

<strong>Washington DC, April 2, 2024 – </strong>Paul Knopp, KPMG U.S. Chair and CEO, has been elected Chair of the CAQ’s Governing Board, effective April 1, 2024.

The CAQ’s Governing Board is comprised of a variety of leaders representing the financial reporting ecosystem, including chief executive officers from some of the largest public company audit firms, the American Institute of CPAs, as well as independent board members from investor, board member and issuer communities. The Governing Board oversees the CAQ’s strategic agenda and activities.

“The financial reporting landscape is constantly evolving, creating new challenges and opportunities for the public company audit profession,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “With his extensive experience serving large, multinational clients as an audit partner and his leadership and long-standing dedication to the profession as the Chair and CEO at KPMG,  Paul will be essential to the CAQ as we fulfill our mission of supporting high-quality financial reporting, convening capital market stakeholders to advance discussions on audit quality issues and championing policies and standards that bolster and support audits.”

“With rapidly emerging technologies such as generative AI, new corporate reporting areas including new climate disclosure rules and a need to strengthen the talent pipeline for the future, now is a transformative time for the public company audit profession,” said Knopp. “I look forward to supporting the CAQ in executing their strategic agenda and supporting the profession as it embraces the future of financial reporting while maintaining a laser focus on investor protection through high-quality audits.”

Knopp succeeds Tim Ryan, US Senior Partner at PwC. “Tim has been instrumental in leading the CAQ to help address some of the most important issues impacting our profession, from the talent pipeline to helping the profession lead the way in emerging areas of corporate reporting like climate and cybersecurity,” said Lindsay.

<strong>About the Center for Audit Quality</strong>

The Center for Audit Quality (CAQ) is a nonpartisan public policy organization serving as the voice of US public company auditors and matters related to the audits of public companies. The CAQ promotes high-quality performance by US public company auditors; convenes capital market stakeholders to advance the discussion of critical issues affecting audit quality, US 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 US public company auditors and audits to dynamic market conditions.

KPMG U.S. Chair and CEO Paul Knopp to Helm CAQ’s Governing Board

Two-thirds of audit committee members see opportunities to improve effectiveness,
 according to Deloitte, Center for Audit Quality Survey
NEW YORK, March 12, 2024 —The “Audit Committee Practices Report: Common Threads Across Audit Committees,” a joint effort between Deloitte’s Center for Board Effectiveness...

<p style="text-align: center;"><em>Two-thirds of audit committee members see opportunities to improve effectiveness,</em></p>
<p style="text-align: center;"><em> according to Deloitte, Center for Audit Quality Survey</em></p>
<strong>NEW YORK, March 12, 2024 —</strong>The “Audit Committee Practices Report: Common Threads Across Audit Committees,” a joint effort between Deloitte’s Center for Board Effectiveness and the Center for Audit Quality (CAQ), identified cybersecurity as the top priority in the next 12 months.

A total of 266 respondents participated in this year’s survey, most of whom are from US public companies (74%), and of which 81% have more than $700 million in market cap.

Respondents cited enterprise risk management (ERM) as the No. 2 priority, demonstrating a broader, more holistic view of risk. Meanwhile, trending topics like artificial intelligence (AI) governance and environmental, social and governance (ESG) reporting are receiving comparably less attention.

“We are seeing the role of the audit committee continue to evolve and adapt as demands on oversight responsibilities change with the business environment and investor expectations,” said Vanessa Teitelbaum, senior director, Professional Practice at CAQ. “Audit committees are zeroed in on one of their core responsibilities: overseeing enterprise risk programs at large. While their agenda continues to grow and expand, key areas like cybersecurity and ERM remain a central focus.”

In addition to cybersecurity and ERM, finance and internal audit talent (a new entry in this year’s survey), compliance with laws and regulations, and finance transformation rounded out the top five priorities. Although the majority of respondents view internal audit as an effective function — one that adds demonstrable value — nearly 80% believe there is an opportunity for internal audit to add even more value. Audit committees are also increasingly prioritizing compliance with laws and regulations, with more than one-third citing it as a top-three priority, a significant increase from last year.

<strong>Cybersecurity remains No. 1 priority for audit committees, followed by ERM</strong>

Cybersecurity topped the list of committee priorities by nearly 20 percentage points over ERM. Notably, 58% of respondents said the audit committee has primary oversight over cybersecurity, with 25% indicating the full board has oversight responsibility. Sixty-nine percent of respondents highlighted cybersecurity as a top concern in the next 12 months, with 3-in-10 ranking it No. 1.

The heightened focus on cybersecurity is likely due to greater disclosure requirements from regulatory agencies. The U.S. Securities and Exchange Commission (SEC), for example, is requiring new disclosures on cybersecurity risks and incidents, as well as management and strategy, including an explanation of oversight processes.

When considering what additional expertise would enhance the audit committee's effectiveness, cybersecurity was highlighted as the top area (44%). This is particularly notable given that almost half (48%) of respondents said they have some level of cybersecurity expertise on the committee.

The evolving risk landscape and emerging risks have put an increased spotlight on ERM. Nearly half of respondents indicated that ERM will be a top focus area in the next 12 months. More than three quarters (85%) of respondents reported some level of ERM expertise on the audit committee, positioning it to effectively oversee management’s risk programs.

<strong>Opportunities for audit committees to increase effectiveness </strong>

With a growing agenda and evolving responsibilities, audit committee members see an opportunity for continuous learning and improvement and have perspectives on how they could enhance their effectiveness. Only one-third of respondents say the committee is effective as is, while the rest feel there is at least one strategy that could boost general effectiveness. Those respondents highlighted three key areas for improvement:
<ul>
 	<li>Increased discussion and/or engagement from members during meetings — highlighted by 29% of respondents.</li>
 	<li>Improved quality of pre-read materials — highlighted by 28% of respondents.</li>
 	<li>Improved quality of presentations during meetings — highlighted by 26% of respondents.</li>
</ul>
“The effectiveness of an audit committee can be distinguished by how it executes its responsibilities,” said Krista Parsons, Audit &amp; Assurance managing director, Audit Committee Program leader, and Governance Services leader at Deloitte’s Center for Board Effectiveness. “Key to this is including the right topics on the agenda, obtaining information that enhances comprehension of these issues, and fostering candid and transparent discussions. These are among the actions that audit committee members can take to be prepared for the issues facing them today and in the future."

<strong>About the survey</strong>

This edition of the “Audit Committee Practices Report,” like prior editions, is based on a survey of audit committee members. A total of 266 respondents participated in this year’s survey, most of whom are from US public companies (74%) and of which 81% have more than $700 million in market cap.

In its third year, the Audit Committee Practices Report added a charitable element to the survey, allowing the first 200 qualifying respondents to select from <a href="https://braven.org/">Braven</a> and/or <a href="https://www.newprofit.org/">New Profit</a> for a $100 donation. This led to a total of $20,000 in donations, allocated per respondent selections.

<strong>About the Center for Audit Quality</strong>

The Center for Audit Quality (CAQ) is a nonpartisan public policy organization serving as the voice of US public company auditors and matters related to the audits of public companies. The CAQ promotes high-quality performance by US public company auditors; convenes capital market stakeholders to advance the discussion of critical issues affecting audit quality, US 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 US public company auditors and audits to dynamic market conditions.

<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 US-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 457,000 people worldwide connect for impact at <a href="http://www.deloitte.com">www.deloitte.com</a>.

###

<strong>Contacts</strong>
<table>
<tbody>
<tr>
<td width="230">Kerry Lee</td>
<td width="262">Brad Jacklin</td>
</tr>
<tr>
<td width="230">Senior Manager, Public Relations</td>
<td width="262">Director, Communications</td>
</tr>
<tr>
<td width="230">Deloitte Services LP</td>
<td width="262">Center for Audit Quality</td>
</tr>
<tr>
<td width="230">+1 916-298-8031</td>
<td width="262">+1 202 494 9560</td>
</tr>
<tr>
<td width="230">kerlee@deloitte.com</td>
<td width="262">bjacklin@thecaq.org</td>
</tr>
</tbody>
</table>
&nbsp;

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see <a href="https://www2.deloitte.com/us/en/legal/about-deloitte.html">www.deloitte.com/about</a> to learn more about our global network of member firms.

Audit Committees Prioritize Cybersecurity, Enterprise Risk Management in New Survey

Transparency and accountability are pillars of effective public policy development. Unfortunately, the roundtable that the PCAOB held this week on its proposal related to company noncompliance with laws and regulations (NOCLAR) failed to live up to these principles. Specifically, the...

<span data-contrast="auto">Transparency and accountability are pillars of effective public policy development. Unfortunately, the roundtable that the PCAOB held this week on its proposal related to company noncompliance with laws and regulations (NOCLAR) failed to live up to these principles. Specifically, the roundtable failed to address the concerns outlined in 78% of the comment letters the PCAOB received, including from those investors, audit committee members, auditors, academics and others who are concerned with the PCAOB’s proposal. </span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span>

<span data-contrast="auto">“Today’s NOCLAR roundtable was a missed opportunity for the PCAOB to further understand the views highlighted in numerous comment letters from engaged stakeholders,” said Julie Bell Lindsay, Chief Executive Officer, CAQ. “Not only did the roundtable surface disagreement as to the actual scope or intention of the proposal, but we are concerned that the lack of diverse stakeholder representation – particularly from investors and audit committees, two important audiences – resulted in dialogue that did not meaningfully address stakeholder concerns. Given the discussion at the roundtable, we believe that the appropriate response is to re-propose the standard, with an economic analysis, to begin to address these concerns.”</span><span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span>

<span data-ccp-props="{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}"> </span>

Statement on the PCAOB’s NOCLAR Roundtable Event

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