Symbol

Global Style Sheet

Video

HeroBlock

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

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

NewsTicker

Text

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. 

Lucy Wang is Director, Anti-Fraud Initiatives at the Center for Audit Quality. In this role since 2019, Wang serves as a subject matter expert on issues related to fraud deterrence and detection. Wang is responsible for leading technical and policy-oriented projects while working closely with representatives from the Anti-Fraud Collaboration, task forces, and the broader profession. Wang manages the development of thought leadership, reports, and other resources that address current financial reporting fraud issues.

Before joining the CAQ, Wang served as Manager at PwC’s Forensic Services practice based in Washington, DC and Shanghai, China, where she assisted Fortune 500 companies with their global compliance programs, cross-border M&amp;A transactions, large scale risk assessments, regulatory investigations, and litigation support. Wang executed complex investigations involving cases such as financial statement fraud, misappropriation of assets, bribery, and corruption. Wang also led numerous anti-corruption and fraud risk assessments globally, including in Asia Pacific, Africa, and Europe.

Wang is a Certified Fraud Examiner, and she holds a BS in finance and accounting from New York University’s Leonard N. Stern School of Business.

Lucy Wang, CFE

The fraud risk landscape continues to evolve as external threats and new innovations impact businesses. All members of the financial reporting ecosystem play a critical role in deterring and detecting fraud, but what contributes to fraud risk and how can...

The fraud risk landscape continues to evolve as external threats and new innovations impact businesses. All members of the financial reporting ecosystem play a critical role in deterring and detecting fraud, but what contributes to fraud risk and how can companies stay vigilant in an ever-changing landscape?

This Fall, the <a href="http://www.antifraudcollaboration.org">Anti-Fraud Collaboration</a> (AFC) hosted a <a href="https://antifraudcollaboration.org/the-impact-of-fraud-on-u-s-public-companies-webcast/">webinar</a> to discuss the prevalence of fraud at U.S. public companies and how organizations can strengthen their anti-fraud efforts using key findings from the Association of Certified Fraud Examiners (ACFE) and AFC’s benchmarking survey on t<a href="https://antifraudcollaboration.org/the-impact-of-fraud-at-us-public-companies-2025-benchmarking-report/">he Impact of Fraud at U.S. Public Companies</a> and the <a href="https://www.thecaq.org/wp-content/uploads/2025/07/caq_institutional-investor-survey-fraud_2025-07.pdf">CAQ’s 2025 Institutional Investor Survey</a>.

I moderated a panel of diverse stakeholders including Andi McNeal, Chief Training Officer at the ACFE, Theodore (Theo) Bunting Jr., Independent Director, and Chris Ekimoff, Principal at  WithumSmith+Brown, PC, who each brought a unique perspective on leading efforts to deter and detect fraud as we discussed the survey results.

Read on for top insights from our discussion.

[custom_quote text="All members of the financial reporting ecosystem play a critical role in deterring and detecting fraud."]
<h3><strong>The Reality of Fraud Losses: Perception vs. Data</strong></h3>
The ACFE and AFC benchmarking report compiled findings from a survey of financial reporting stakeholders who work for or do substantial work with U.S. public companies, asking about their companies’ fraud losses in recent years, factors that contribute to fraud, and how their companies are managing various types of fraud risks. The respondents had direct visibility into the total revenue and the actual amount of known losses from <em>all forms of fraud</em> for 2023 and 2024.

The <a href="https://legacy.acfe.com/report-to-the-nations/2024/">ACFE’s 2024 Report to the Nations</a> estimated that organizations lose an average of 5% of their annual revenue to fraud. However, data from our latest benchmarking report specific to U.S. public companies paints a more nuanced picture of the issue.

<img class="alignnone wp-image-17089 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AiA_AFC-Webinar_Image-1.png" alt="" width="352" height="295" />
<h6><em>Fig. 1, <a href="https://www.acfe.com/fraud-resources/the-impact-of-fraud-at-us-public-companies">The Impact of Fraud at U.S. Public Companies Benchmarking Report</a></em></h6>
<ul>
 	<li><strong>Known Losses</strong>: Survey respondents reported that the median percentage of annual revenue lost due to <em>all forms of</em> <em>known</em> <em>fraud</em> at U.S. public companies was 1.07% and 1.06% for 2023 and 2024, respectively.</li>
 	<li><strong>Estimated Losses</strong>: When asked to estimate the loss due to fraud at a <em>typical</em>S. public company (accounting for undetected fraud), estimates rose to a median estimate of 2.5%, of which employees and investors estimated fraud losses of 3% of annual revenue, and external roles estimated 4%.</li>
</ul>
While 1% may sound minimal, 1% of the Fortune 500’s revenue translates to roughly $200 billion annually. However, it is important to contextualize the amount on a micro-level that is unique to organizations and their specific types of fraud risks and risk profile. Therefore, it is important to reframe the 1% statistic by considering what is an appropriate margin for error for large multinational companies that operate in multiple jurisdictions.

The speakers also described a "NIMO" (Not In My Organization) phenomenon. While many financial reporting stakeholders recognize that fraud is a persistent problem, few choose to believe that fraud is occurring within their own organizations. This mindset can be dangerous for companies. It is important for organizations and stakeholders to stay vigilant so they can assess and respond to fraud risks appropriately.

[custom_quote text="While many financial reporting stakeholders recognize that fraud is a persistent problem, few choose to believe that fraud is occurring within their own organizations."]
<h3><strong>The Shifting Fraud Risk Landscape: External Threats Take Center Stage</strong></h3>
The ACFE and AFC survey results highlighted a distinct shift in how organizations determine their greatest fraud risks. While internal control over financial reporting remains vital, the most probable and significant fraud risks identified were largely external.

<img class="alignnone wp-image-17087 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AiA_AFC-Webinar_Image-2.png" alt="" width="519" height="461" />
<h6><em>Fig. 3, <a href="https://www.acfe.com/fraud-resources/the-impact-of-fraud-at-us-public-companies">The Impact of Fraud at U.S. Public Companies Benchmarking Report</a></em></h6>
As illustrated in the heat map, the risks that have the highest likelihood of occurring, according to survey respondents, include:
<ol>
 	<li>Cyberfraud (rated as the highest likelihood and highest significance)</li>
 	<li>Fraud by vendors and sellers</li>
 	<li>Customer payment fraud</li>
</ol>
Interestingly, traditional “internal” threats, such as financial statement fraud and asset misappropriation, were viewed as less likely to occur, though its impact is still viewed as significant. This suggests that while companies’ internal controls are improving, their defenses are continuously being threatened by external risks.

[custom_quote text="While internal control over financial reporting remains vital, the most probable and significant fraud risks identified were largely external."]
<h3><strong>The “Why”: Contributing Factors and The Culture Gap</strong></h3>
Each role within an organization views fraud differently depending on their unique perspective. This divergence was clear in the AFC’s benchmarking report when respondents were asked to rank the significance of ten factors in contributing to the current level of fraud.

Employees and external respondents (consultants, advisors, external auditors, and government agencies) cited the regulatory environment, external pressures, and organizational culture as top contributing factors. Governance responses highlighted the quality of external audits, technological advancements, and maturity of anti-fraud programs as most significant. The only factor in all groups' top five ranking was economic conditions, highlighting that all stakeholders are impacted by economic uncertainty and believe it could contribute to a heightened fraud risk environment.

This data emphasizes the need for stronger internal communication. As noted during the panel, employees on the front lines feel the pressure of compliance and the economy, while boards rely heavily on assurance providers. To bridge this gap, organizations must prioritize culture.

Panelists highlighted that while technology, including artificial intelligence (AI), is a valuable tool, it is ultimately "human behaviors and communications" that drive outcomes. A strong tone at the top, flowing from management to the board of directors, is critical for fostering trust. Without that culture of trust, essential detection mechanisms such as whistleblower programs cannot function effectively.

[custom_quote text="Employees on the front lines feel the pressure of compliance and the economy, while boards rely heavily on assurance providers."]
<h3><strong>Looking Ahead: Vigilance is Key</strong></h3>
As we look forward, the majority of survey respondents anticipate that the fraud risk environment will become even more challenging, likely due to emerging technologies such as AI and a shifting regulatory landscape.

<img class="alignnone wp-image-17088 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AiA_AFC-Webinar_Image-3.png" alt="" width="642" height="220" />
<h6><em>Fig. 6, <a href="https://www.acfe.com/fraud-resources/the-impact-of-fraud-at-us-public-companies">The Impact of Fraud at U.S. Public Companies Benchmarking Report</a></em></h6>
As seen in the graph and discussed during our webinar, 66% of survey respondents expect the level of fraud to increase (either slightly or significantly) over the next two years. Investors share this concern, with 65% expecting fraud levels to increase.

How can financial reporting stakeholders strengthen our defenses against fraud? Survey respondents in governance roles suggested three areas for improvement:
<ol>
 	<li><strong>Proactive and Continuous Monitoring</strong>: Moving from reactive investigation to real-time detection.</li>
 	<li><strong>Technology and AI</strong>: Leveraging tools to proactively identify anomalies in large datasets.</li>
 	<li><strong>Fraud Awareness and Culture</strong>: Training employees to maintain a "fraud lens" and exercise professional skepticism.</li>
</ol>
Whether you are an external auditor, an internal auditor, management, or a board member, you have a role to play in the fight against fraud. The fraud risk landscape is dynamic, but by leveraging technology, fostering a culture of skepticism, and breaking down silos within your organization, all members of the ecosystem can better protect the integrity of financial reporting and the U.S. capital markets.

I encourage you to watch the <a href="https://antifraudcollaboration.org/the-impact-of-fraud-on-u-s-public-companies-webcast/">replay of the AFC webinar</a> and download the full<a href="https://antifraudcollaboration.org/the-impact-of-fraud-at-us-public-companies-2025-benchmarking-report/"> AFC Benchmarking Report</a> and<a href="https://www.thecaq.org/institutional-investor-survey-fraud-2025"> CAQ Investor Survey</a>. Follow the AFC on <a href="https://www.linkedin.com/company/antifraudcollaboration/">LinkedIn</a> for the latest insights on fraud deterrence and detection.

[custom_quote text="Whether you are an external auditor, an internal auditor, management, or a board member, you have a role to play in the fight against fraud."]

Culture Technology, and Vigilance: How the Fraud Risk Landscape is Evolving

Anti-Fraud

Blog Post

Desiré Carroll, CPA, CA(SA) is a Senior Director, Professional Practice at the Center for Audit Quality. Her role involves advancing technical and policy-oriented projects to identify, develop, and seek consensus on issues affecting the public company auditing profession. This includes engaging with senior leaders across the financial reporting ecosystem, drafting comment letter responses to regulators, and developing thought leadership publications.

Before joining the CAQ, Desiré served as Associate Director – Sustainability Assurance at the American Institute of Certified Public Accountants (AICPA). Prior to that, she spent over 11 years at Deloitte primarily in their New York M&amp;A Transaction Services group and initially in their Audit practice. Desiré is a CPA and a South African Chartered Accountant.

Desiré Carroll, CPA, CA(SA)

We analyzed S&amp;P 500 companies’ SEC Form 10-Ks to understand what leading companies are disclosing about these fast-moving topics and where in the 10-K companies are relaying this information to investors. Our findings show that AI, digital assets, and sustainability-related...

We analyzed <a href="https://www.thecaq.org/sp500-companies-10K-analysis">S&amp;P 500 companies’ SEC Form 10-Ks</a> to understand what leading companies are disclosing about these fast-moving topics and where in the 10-K companies are relaying this information to investors. Our findings show that AI, digital assets, and sustainability-related disclosures have grown or remained strong compared to previous years’ 10-K filings.

It’s critical that companies clearly communicate how these topics are impacting operations, from potential risks to possible financial statements impacts, to foster investor and public trust in their disclosures.

Keep reading for my top takeaways from our 10-K analysis and how auditors can support these evolving disclosures.

[custom_quote text="Our findings show that AI, digital assets, and sustainability-related disclosures have grown or remained strong compared to previous years’ 10-K filings."]
<h3><strong>The Rapid Rise of AI Disclosures</strong></h3>
AI is rapidly being integrated into business operations, accelerating the need for companies to disclose how they are using the technology. <a href="https://www.thecaq.org/sp-500-and-ai-reporting">Our analysis</a> found that 90% of S&amp;P 500 companies (448 companies) mentioned AI-related information in their 2024 10-K – marking a nearly 25% increase from 359 companies in 2023. This growth confirms that transparency in AI is a key focus for management and investors.

<img class="alignnone wp-image-17039 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_AI-Related-Information-Mentioned-in-10-K.png" alt="" width="2400" height="1254" />

In our analysis, the implications of AI are most frequently cited by companies as part of introducing risks (Item 1A. Risk Factors) of which investors should be aware and business operations and strategy (Item 1. Business) in the 10-K.

Public company auditors can <a href="https://www.thecaq.org/rota-ai">play a key role</a> in enhancing confidence in a company’s governance and controls over AI. There is a clear need for trust in AI, and auditors can help bridge this gap.

<img class="alignnone wp-image-17044 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_Section-of-10-K-AI-is-Mentioned-1.png" alt="" width="2400" height="1254" />

We also observed an over 50% increase in AI-related mentions related to the financial statements (Item 8 in the 10-K). Our <a href="https://www.thecaq.org/institutional-investor-survey-artificial-intelligence">Institutional Investor Survey</a> found that most investors support the use of AI in the audit process, with 90% saying the technology would increase their trust in the results by improving accuracy and reducing errors. Auditors are utilizing AI to improve the efficiency of audits in an ever-changing economy and will continue upskilling to leverage the technology to its full potential.

[custom_quote text="We also observed an over 50% increase in AI-related mentions related to the financial statements (Item 8 in the 10-K)."]
<h3><strong>Digital Assets Introduce New Blind Spots</strong></h3>
This year, we performed our first-ever analysis of <a href="https://www.thecaq.org/sp-500-and-digital-asset-reporting">digital asset-related disclosures</a> in S&amp;P 500 companies’ 10-Ks. We observed that only 47 S&amp;P 500 companies, or approximately 9%, mentioned digital asset-related information in their latest 10-K, with most mentions tied to potential areas of risk (Item 1A. Risk Factors).

This aligns with our Fall 2025 <a href="https://www.thecaq.org/audit-partner-pulse-survey">Audit Partner Pulse Survey</a>, where 78% of respondents indicated that companies in their primary industry have no exposure to cryptocurrency, and only 6% indicate they’re having conversations with their clients about the potential accounting and reporting implications of the use of cryptocurrency.

<img class="alignnone wp-image-17045 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_Section-of-10-K-Digital-Assets-are-Mentioned.png" alt="" width="2400" height="1254" />

The primary risks described in digital assets related disclosures were regulatory uncertainty, market volatility, and technological adaptation costs. Companies specifically noted that the uncertain and evolving nature of the regulatory landscape could lead to costly future compliance. Additionally, the volatility of the digital asset market was highlighted as a risk that could impact companies, whether they are directly or indirectly invested.

While this new technology often promises transparency, as shown in our latest <a href="https://partnerswsj.com/caq-auditing-cryptos-blind-spots/p/1">Wall Street Journal article</a>, it does not eliminate risks that lurk in off-chain information and private key management. Auditors can help identify and address these risks and ensure that even in decentralized environments, companies maintain accountability and financial integrity.

[custom_quote text="The volatility of the digital asset market was highlighted as a risk that could impact companies, whether they are directly or indirectly invested."]
<h3><strong>Sustainability-Related Disclosures Remain Largely Consistent</strong></h3>
The latest S&amp;P 500 companies’ 10-Ks reflect ongoing investor demand for <a href="https://www.thecaq.org/sp-500-10k-climate">sustainability-related information</a>, with a consistent number of 494 companies disclosing sustainability related information in 2023 and 2024 filings.

Most disclosures continued to relate to potential risks and business operations (Items 1A and 1). Climate-related mentions in financial statements increased by 18% with most mentions continuing to fall within significant accounting policies, commitments and contingencies or litigation, debt or borrowing arrangements, and income taxes.

<img class="alignnone wp-image-17046 size-full" src="https://www.thecaq.org/wp-content/uploads/2025/12/2025_12_Climate-Related-Information-Mentioned-in-10-K.png" alt="" width="2400" height="1254" />

From 2023 to 2024, there was a roughly 16% decrease in companies that disclosed net zero or carbon neutral commitments and a 5% decrease in companies that mentioned scope 1, 2, or 3, greenhouse gas emissions information in their Form 10-K’s.

We observed that roughly 21% of S&amp;P 500 companies mentioned the European Union Corporate Sustainability Reporting Directive in some way (a 9% increase from the prior year), and 18% mentioned the California Climate Laws (a 3% increase from the prior year), demonstrating that despite the maturity of sustainability-related disclosures, the regulatory landscape demands that leading companies continuously evaluate how evolving disclosure requirements may impact business risks or operations.

[custom_quote text="From 2023 to 2024, there was a roughly 16% decrease in companies that disclosed net zero or carbon neutral commitments."]
<h3><strong>The Future of the Profession</strong></h3>
A key takeaway from our analysis of 10-Ks is that much of what companies are disclosing about AI, digital assets, and sustainability is largely being disclosed in sections of the 10-K that are not the financial statements. This means that the information is not being audited as part of the financial statement audit. That is because in an audit of the financial statements, the auditor has a limited responsibility for information disclosed in sections of the 10-K that are not the financial statements. Professional standards require the auditors to “read and consider” that information. However, “reading and considering” information involves substantially less work than an <span data-teams="true">audit</span>.

The good news, as CAQ CEO Julie Bell Lindsay recently said at an Axios event, “auditors are not one trick ponies.” As the reliability of information presented outside of the financial statements continues to become more critical to investors, the audit profession stands ready to bring the same trust to this information as they have brought to financial statements for many years. In fact, we see this happening: <a href="https://www.thecaq.org/sp-500-and-esg-reporting">73% of S&amp;P 500 companies</a> that report standalone sustainability information already obtain assurance over certain of that information in an assurance engagement that is separate and apart from the audit of the financial statements.

The CAQ will continue to monitor how leading companies are disclosing key information and how auditors can play a role in building trust in this data, and we encourage <a href="https://www.thecaq.org/audit-committee-resource-center">audit committees</a> and <a href="https://www.thecaq.org/stakeholders-investors">investors</a> to understand how these disclosure trends can support well-informed decisions that shape our economy.

For the latest insights on corporate reporting trends, 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>.

AI, Digital Assets, and Sustainability: What Form 10-Ks Tell Us About Reporting Trends

Emerging Reporting Areas

hs_trevor-barton

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

hs_jefferey-johans

HS_Jefferey Johans

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

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

Artificial Intelligence

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 DC (December 4, 2025) – Today, the Center for Audit Quality (CAQ) and Ideagen Audit Analytics released the 12th annual Audit Committee Transparency Barometer Report. The report, which has been conducted since 2014, analyzes audit committee disclosures of companies...

<b><span data-contrast="auto">Washington DC (December 4, 2025)</span></b><span data-contrast="auto"> – Today, the Center for Audit Quality (CAQ) and Ideagen Audit Analytics released the 12th annual Audit Committee Transparency Barometer Report. The report, which has been conducted since 2014, analyzes audit committee disclosures of companies in the S&amp;P 1500.</span><span data-ccp-props="{}"> </span>

<span data-contrast="auto">As audit committees navigate emerging risks including economic disruption and the rapid integration of artificial intelligence, investors need insights into board composition, expertise, and oversight processes. This year’s Barometer shows that while skills matrix disclosure continues at high rates and disclosure of cybersecurity expertise on boards has grown, most disclosure areas have stagnated or declined, providing audit committees with an opportunity to enhance transparency about their evolving oversight responsibilities.</span><span data-ccp-props="{}"> </span>

<span data-contrast="auto">Key findings of the report include: </span><span data-ccp-props="{&quot;335559739&quot;:0}"> </span>
<ul>
 	<li aria-setsize="-1" 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;}" data-aria-posinset="1" data-aria-level="1"><span data-contrast="auto">90% of S&amp;P 500 companies disclosed the board of directors' skills matrix, an increase from 85% in 2024. S&amp;P MidCap companies (80%) and S&amp;P SmallCap companies (70%) also showed slight increases.</span><span data-ccp-props="{&quot;335559739&quot;:0}"> </span></li>
</ul>
<ul>
 	<li aria-setsize="-1" 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;}" data-aria-posinset="2" data-aria-level="1"><span data-contrast="auto">65% of S&amp;P 500 boards disclosed they have a cybersecurity expert—representing a 5-percentage point increase from 2024.</span><span data-ccp-props="{&quot;335559739&quot;:0}"> </span></li>
</ul>
<ul>
 	<li aria-setsize="-1" 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;}" data-aria-posinset="3" data-aria-level="1"><span data-contrast="auto">Stagnation and decline of audit committee disclosures were observed across several measures, including (for S&amp;P 500 companies): disclosure of the annual evaluation of the external auditor (decreased from 39% to 38%); considerations in appointing or (re)appointing the external auditor (remained flat at 50%); and factors contributing to the selection of the audit partner (decreased from 17% to 16%).</span><span data-ccp-props="{&quot;335559739&quot;:0}"> </span></li>
</ul>
<span data-contrast="auto">"When disruption accelerates, disclosures cannot stand still," said Julie Bell Lindsay, CEO of the Center for Audit Quality. "Audit committees perform a key role in our capital markets, from overseeing the external auditor to monitoring company financial reporting and internal controls and serving as an effective check on management.  Meaningful, investor-focused disclosure is one of the most powerful tools audit committees have to tell their story and demonstrate this important role. Each proxy season presents an important opportunity for audit committees to more clearly communicate how they oversee risk and uphold audit quality, strengthening investor confidence in a rapidly changing environment."</span><span data-ccp-props="{&quot;335559739&quot;:0}"> </span>

<span data-contrast="auto">"As audit committee responsibilities continue to expand, the Audit Committee Transparency Barometer provides critical insights into how committees are adapting their disclosures and where there is room for improvement," said Michael Nohrden, VP Strategy Audit and Risk for Ideagen. "Our ongoing collaboration with the CAQ ensures audit committees have access to robust data and peer comparisons across the S&amp;P 1500, empowering them to strengthen their communications with stakeholders. With emerging risks like AI adoption and cybersecurity threats reshaping oversight responsibilities, transparent disclosure has never been more important."</span><span data-ccp-props="{}"> </span>

<span data-contrast="auto">The full report is available to read </span><a href="https://www.thecaq.org/audit-committee-transparency-barometer"><span data-contrast="none">here</span></a><span data-contrast="auto">. </span><span data-ccp-props="{}"> </span>

+++

<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.

<b><span data-contrast="auto">About Ideagen Audit Analytics</span></b> <span data-ccp-props="{}"> </span>

<span data-contrast="auto">Ideagen 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 info@auditanalytics.com or call 508-476-7007.  </span><span data-ccp-props="{}"> </span>

Annual Audit Committee Disclosure Barometer Reveals Stagnation in Key Disclosure Areas Despite Period of Disruption

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

Talent

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

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="http://www.deloitte.com">www.deloitte.com/</a>about to learn more about our global network of member firms.

Cybersecurity, Enterprise Risk Management, and Meeting Effectiveness Are Top Priorities for Audit Committees, According to Deloitte, Center for Audit Quality Survey

Investors

Cybersecurity

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>SEC Division of Examinations Announces 2026 Priorities</strong></h3>
The SEC's Division of Examinations <a href="https://www.sec.gov/newsroom/press-releases/2025-132-sec-division-examinations-announces-2026-priorities">released</a> its 2026 examination priorities. For fiscal year 2026, in addition to conducting examinations in core areas such as fiduciary duty, standards of conduct, and the custody rule, the Division will also examine for compliance with new rules, such as the 2024 amendments to Regulation S-P.
<h3><strong>SEC Announces New Date and Time for Roundtable on Financial Surveillance and Privacy</strong></h3>
The SEC's Crypto Task Force <a href="https://www.sec.gov/newsroom/press-releases/2025-134-sec-announces-new-date-time-roundtable-financial-surveillance-privacy">rescheduled</a> its Financial Surveillance and Privacy Roundtable, previously scheduled for October, to Monday, Dec. 15, 2025. The roundtable will be held at the SEC's headquarters. The event will be open to the public and webcast live on the SEC's website.
<h3><strong>SEC Investor Advisory Committee Meeting on Regulatory Changes in Corporate Governance, the Tokenization of Equity Securities</strong></h3>
The SEC's Investor Advisory Committee <a href="https://www.sec.gov/newsroom/press-releases/2025-135-sec-investor-advisory-committee-host-dec-4-meeting-regulatory-changes-corporate-governance">held</a> a virtual public meeting on December 4, 2025. The committee hosted two panels:
<ul>
 	<li>Regulatory Changes in Corporate Governance</li>
 	<li>Tokenization of Equities: How Issuance, Trading, and Settlement Would Work with Existing Regulation</li>
</ul>
The full <a href="https://www.sec.gov/about/advisory-committees/investor-advisory-committee/iac120425-agenda">agenda</a> is available on the committee's webpage.

<img class="alignnone wp-image-13851" src="https://www.thecaq.org/wp-content/uploads/2023/06/PPTA_Section-Header_FASB.png" alt="FASB" width="350" height="44" />
<h3><strong>FASB Improves Guidance on Purchased Loans</strong></h3>
The FASB <a href="https://fasb.org/news-and-meetings/in-the-news/fasb-improves-guidance-on-purchased-loans-423314">published</a> an Accounting Standards Update (ASU) that improves the accounting for purchased loans. The new ASU expands the population of acquired financial assets accounted for using the gross-up approach. The ASU, including transition and effective date information, is available at www.fasb.org.
<h3><strong>Financial Accounting Standards Advisory Council (FASAC) Meeting Recap: September 18, 2025</strong></h3>
The FASB <a href="https://www.fasb.org/Page/PageContent?PageId=/about-us/advisory-groups/fasac/fasac-meeting-materials/fasac-meeting-recap-september-18-2025.html">posted</a> the recap of FASAC’s most recent quarterly meeting, held on Thursday, September 18, 2025. At the meeting, the FASB Chair provided highlights on FASB activities, and staff members from the SEC and PCAOB, and the AICPA Auditing Standards Board Chair commented on current issues and activities. Council members also discussed the <em>Agenda Consultation</em> and the <em>Post-Implementation Review — Current Expected Credit Losses</em>.
<h3><strong>FASB Issues Post-Implementation Review Report for Its Leases Standard (Leases PIR)</strong></h3>
The FASB <a href="https://fasb.org/news-and-meetings/in-the-news/fasb-issues-post-implementation-review-report-for-its-leases-standard-423362">issued</a> the report on <em>Post-Implementation Review: Leases (Topic 842)</em>. The report discusses how the FASB staff conducted the Leases PIR process and, using what was learned during the PIR process, describes improvements that were made to the leases standard and, more broadly, areas of improvement for future standard-setting.
<h3><strong>FASB Issues New Standard to Improve Hedge Accounting Guidance</strong></h3>
The FASB <a href="https://fasb.org/news-and-meetings/in-the-news/fasb--issues-new-standard-to-improve-hedge-accounting-guidance-423381">published</a> an ASU to clarify and improve hedge accounting guidance. The ASU enables entities to apply hedge accounting to a greater number of highly effective economic hedges in the following five areas:
<ul>
 	<li>Similar Risk Assessment for Cash Flow Hedges</li>
 	<li>Hedging Forecasted Interest Payments on Choose-Your-Rate Debt Instruments</li>
 	<li>Cash Flow Hedges of Nonfinancial Forecasted Transactions</li>
 	<li>Net Written Options as Hedging Instruments</li>
 	<li>Foreign-Currency-Denominated Debt Instrument as Hedging Instrument and Hedged Item (Dual Hedge)</li>
</ul>
The ASU, including transition and effective date information, is available at <a href="https://fasb.org/">fasb.org</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>AICPA, State CPA Societies Urge Department of Education to Recognize Accounting Programs as Professional Degree Programs</strong></h3>
The AICPA and state CPA societies strongly <a href="https://www.aicpa-cima.com/news/article/aicpa-state-cpa-societies-urge-department-of-education-to-recognize">oppose</a> any proposal that fails to recognize accounting as a professional degree program. The organizations are calling on the U.S. Department of Education to explicitly include accounting programs in the regulatory definition of "professional degree programs."

<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) Takes Steps to Support Quality and Consistency in the Assurance of Sustainability Reporting</strong></h3>
The FRC <a href="https://www.frc.org.uk/news-and-events/news/2025/11/frc-takes-steps-to-support-quality-and-consistency-in-the-assurance-of-sustainability-reporting/">issued</a> International Standard on Sustainability Assurance (ISSA) (UK) 5000, <em>General Requirements for Sustainability Assurance Engagements</em>, which provides U.K. companies, investors, and assurance providers with a consistent, internationally aligned assurance standards for voluntary use in sustainability assurance engagements. ISSA (UK) 5000 is a U.K. version of the global benchmark standard for sustainability assurance, developed by the International Auditing and Assurance Standards Board (IAASB).
<h3><strong>FRC Publishes Practical Insights to Help Smaller Listed Companies Improve Corporate Reporting Quality</strong></h3>
The FRC <a href="https://www.frc.org.uk/news-and-events/news/2025/11/frc-published-insights-on-reporting-by-large-private-uk-companies-after-first-year-of-assuming-governance/">published</a> practical insights to help smaller listed companies improve the quality of their corporate reporting and make the most of their resources. <em>Thematic review: Reporting by the U.K.'s smaller listed companies</em> focuses on four key areas where investors pay close attention and where the FRC has historically identified room for improvement:
<ul>
 	<li>Revenue recognition</li>
 	<li>Cash flow statements</li>
 	<li>Impairment of non-financial assets</li>
 	<li>Financial instruments</li>
</ul>
<h3><strong>IAASB Publishes New Illustrative Reports to Support ISSA 5000 Implementation</strong></h3>
The IAASB <a href="https://www.iaasb.org/news-events/2025-11/iaasb-publishes-new-illustrative-reports-support-issa-5000-implementation">published</a> a new set of illustrative practitioner's assurance reports to further support the implementation of International Standard on Sustainability Assurance (ISSA) 5000, <em>General Requirements for Sustainability Assurance Engagements</em>. While ISSA 5000 includes four illustrative reports that reflect the baseline requirements of the standard, this new publication provides more specific examples to help practitioners apply the standard in real-world scenarios.
<h3><strong>October 2025 International Accounting Standards Board (IASB) Update and Podcast Now Available</strong></h3>
The International Financial Reporting Standards (IFRS) Foundation <a href="https://www.ifrs.org/news-and-events/news/2025/11/october-2025-iasb-update-and-podcast-now-available/">announced</a> that the October 2025 IASB update and podcast are now available.
<h3><strong>November 2025 IASB Agenda, Meeting Papers, and Summary Now Available</strong></h3>
The IFRS Foundation <a href="https://www.ifrs.org/news-and-events/calendar/2025/november/international-accounting-standards-board/">announced</a> that the agenda, papers, and meeting summary of the November 2025 IASB meeting are now available. The IASB update and podcast are also available <a href="https://www.ifrs.org/news-and-events/news/2025/11/november-2025-iasb-update-and-podcast-now-available/">here</a>.
<h3><strong>December 2025 IASB Agenda and Meeting Papers Now Available</strong></h3>
The IFRS Foundation <a href="https://www.ifrs.org/news-and-events/calendar/2025/december/international-accounting-standards-board/">announced</a> that the agenda, papers, and meeting summary of the December 2025 IASB meeting are now available.
<h3><strong>IASB Issues Amendments for Translating Financial Information Into Hyperinflationary Currencies</strong></h3>
The IASB <a href="https://www.ifrs.org/news-and-events/news/2025/11/iasb-issues-amendments-ias-21/">issued</a> amendments that clarify how companies should translate financial statements from a non-hyperinflationary currency into a hyperinflationary one. These narrow-scope amendments aim to improve the usefulness of the resulting information in a cost-effective manner. The amendments to IAS 21, <em>The Effects of Changes in Foreign Exchange Rates,</em> are effective for annual periods beginning on or after January 1, 2027. Companies can choose to apply them earlier.
<h3><strong>IASB Issues Illustrative Examples on Reporting Uncertainties in Financial Statements</strong></h3>
The IASB <a href="https://www.ifrs.org/news-and-events/news/2025/11/iasb-issues-illustrative-examples-reporting-uncertainties-financial-statements/">issued</a> illustrative examples demonstrating how companies can apply IFRS Accounting Standards when reporting the effects of uncertainties in their financial statements. The examples use climate-related scenarios as practical illustrations, but the underlying principles apply more broadly to all uncertainties.
<h3><strong>International Organization of Securities Commissions (IOSCO) Board Meets in Madrid; Issues Four New Publications</strong></h3>
The IOSCO <a href="https://www.iosco.org/news/pdf/IOSCONEWS775.pdf">published</a> the following reports:
<ul>
 	<li>Final Report on Pre-Hedging;</li>
 	<li>Final Report on Environmental, Social and Governance (ESG) Indices as Benchmarks;</li>
 	<li>Consultation Report on Recommendations for Secondary Market Disclosure;</li>
 	<li>Statement on the Importance of High-Quality Valuation Information in Financial Reporting</li>
</ul>
These publications are products of the 2025 workplan and part of the outcomes of the recent board meeting that took place in Madrid.
<h3><strong>IOSCO Publishes Final Report on Financial Asset Tokenization</strong></h3>
The IOSCO <a href="https://www.iosco.org/news/pdf/IOSCONEWS778.pdf">published</a> its Final Report on the Tokenization of Financial Assets. Key findings include:
<ul>
 	<li>Tokenization is growing but remains nascent.</li>
 	<li>Efficiency gains are uneven.</li>
 	<li>Risks are familiar but evolving.</li>
 	<li>Regulatory approaches vary.</li>
</ul>
<h3><img class="wp-image-13850 alignnone" style="font-size: 16px;" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/PPTA_Section-Header_CAQ.png" alt="CAQ" width="400" height="50" /></h3>
<h3><strong>Fall 2025 Audit Partner Pulse Survey</strong></h3>
The CAQ <a href="https://www.thecaq.org/audit-partner-pulse-survey">posted</a> the results of its Fall 2025 Audit Partner Pulse Survey. Highlights of the report include:
<ul>
 	<li>Economic Outlook: Economic Sentiment Stabilizing, but Cautious</li>
 	<li>Business Trends: Regulatory Uncertainty Reshaping Strategy and Artificial Intelligence as an Opportunity Amid Austerity</li>
</ul>
<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 | November 2025

Newsletter

PPTA

Welcome back, Audit Insiders!

I hope you all were able to enjoy the Thanksgiving holiday and recharge for the race to the New Year. It is hard to believe that the traditional “busy season” is fast approaching.

My colleagues and I remain...

<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!

I hope you all were able to enjoy the Thanksgiving holiday and recharge for the race to the New Year. It is hard to believe that the traditional “busy season” is fast approaching.

My colleagues and I remain focused on providing the clarity and technical perspective necessary to support 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>PCAOB</h2>
<h3><strong>Christina Ho to Depart the PCAOB</strong></h3>
<span style="font-size: 16px;">Board member Christina Ho <a href="https://pcaobus.org/news-events/speeches/speech-detail/board-member-christina-ho-announces-resignation-from-pcaob-and-reflects-on-her-tenure">announced</a> that she will depart the PCAOB the earlier of January 31, 2026 or the date the SEC appoints a successor to her position. Ho’s term ended on October 24, 2025, and she chose to not apply for reappointment. I thank Board Member Ho for her service to the PCAOB since she was sworn in on November 9, 2021.  ​​​​</span>
<h3><strong>PCAOB SEIAG Hosts Meeting on Emerging Technologies</strong></h3>
<span style="font-size: 16px;">On November 5, the PCAOB’s Standards and Emerging Issues Advisory Group (SEIAG) held a <a href="https://pcaobus.org/news-events/speeches/speech-detail/artificial-intelligence-and-cryptocurrency--the-seiag-s-broad-perspectives-are-necessary-in-a-changing-audit-landscape">meeting</a> dedicated to technology. The discussion centered on two critical areas: AI and Cryptocurrency.</span>

<span style="font-size: 16px;">Acting Chair George Botic emphasized that the PCAOB cannot afford a "wait and see" approach to AI. He <a href="https://pcaobus.org/news-events/speeches/speech-detail/artificial-intelligence-and-cryptocurrency--the-seiag-s-broad-perspectives-are-necessary-in-a-changing-audit-landscape">stated</a>, “Our response must be principled, adaptive, and deliberate. In professional services, like auditing, where critical thinking and professional skepticism are non-negotiable, the adoption of AI demands a heightened understanding of its impact and consequences from all of us.” </span>

<span style="font-size: 16px;">The meeting also discussed the novel challenges crypto introduces to traditional audit procedures. SEIAG members discussed the AICPA Digital Assets Practice aid and encouraged any guidance from the PCAOB to start with guidance in that practice aid.</span>
<h3><strong>PCAOB Hosts Smaller Firm and Broker-Dealer Forum in Los Angeles</strong></h3>
<span style="font-size: 16px;">On November 12, Board Member Kara M. Stein hosted a forum on Auditing in the Small Business Environment and on Auditing Broker-Dealers in Los Angeles. This forum provided registered audit firms with timely information and updates on PCAOB activities for both the small business sector and broker-dealers, while also serving as an opportunity for PCAOB staff and Board Members to receive direct input on current issues impacting the profession. Learn more about <a href="https://pcaobus.org/news-events/events/event-details/forum-on-auditing-in-the-small-business-environment-and-on-auditing-broker-dealers-2025">the event</a>.​​</span>
<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>Role of the Auditor: Professional Skepticism</strong></h3>
The consistent application of professional skepticism is the indispensable cornerstone of audit quality, particularly in periods of uncertainty and change. Recognizing that its application is inherently judgment-based and situational, the CAQ is actively driving the conversation on how auditors can cultivate and maintain a questioning mindset throughout all phases of the audit.

Our <a href="https://antifraudcollaboration.org/rota-fraud-exercising-and-maintaining-professional-skepticism/">latest resource</a>, in collaboration with the <a href="https://antifraudcollaboration.org/">Anti-Fraud Collaboration (AFC)</a>, explores why this focus is essential as fraud risks evolve and financial reporting challenges grow more nuanced. Auditors must embrace continuous learning and adaptability to understand how advancements in technology, like Artificial Intelligence, impact their ability to effectively exercise skepticism. Our guidance helps practitioners hone their questioning mindsets, use tools like the skepticism continuum, and understand factors that could otherwise impede this critical judgment. I encourage you to explore the <a href="https://antifraudcollaboration.org/rota-fraud-exercising-and-maintaining-professional-skepticism/">actionable insights</a> and share them with your network.
<h2>Fighting Fraud</h2>
<h3><strong>Celebrating International Fraud Awareness Week</strong></h3>
In November, we celebrated International Fraud Awareness Week (November 16–22), which served as a vital global effort to combat fraud by promoting anti-fraud awareness and education. To participate in this celebration, the AFC hosted our second annual Fraud Forum to convene stakeholders in Washington, DC to discuss what all stakeholders in the financial reporting ecosystem can do to strengthen our fraud deterrence and detection.

Stay tuned for a summary of this forum in a future <em>Audit Insider</em>.

<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>10-K Analysis: Assurance Drives Credibility in New Disclosures</strong></h3>
The most recent <a href="https://www.thecaq.org/sp500-companies-10K-analysis?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">analysis</a> of S&amp;P 500 Companies' 10-Ks, detailed further in my colleague <a href="https://www.thecaq.org/aia-ai-digital-assets-and-sustainability?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">Desiré Carroll's latest blog</a>, confirms that corporate reporting continues to evolve and incorporate disclosures on new and emerging topics. The research underscores the importance of transparency and disclosure to our capital markets.

In analyzing <a href="https://www.thecaq.org/sp-500-and-ai-reporting?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">AI disclosures</a>, we observed that 90% of S&amp;P 500 companies referenced AI-related information in their 2024 10-K, demonstrating an increase of nearly 25% compared to the preceding year. Our first-ever analysis of <a href="https://www.thecaq.org/sp-500-and-digital-asset-reporting?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">digital assets</a> found that 47 S&amp;P 500 companies are reporting this information. Finally, reporting of climate-related information remains nearly universal, with 494 S&amp;P 500 companies mentioning <a href="https://www.thecaq.org/sp-500-10k-climate?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">climate-related information</a> in 2024.

Read Desiré’s <a href="https://www.thecaq.org/aia-ai-digital-assets-and-sustainability?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">blog</a> to learn more about where in the 10-K we observe disclosures in these emerging areas. Spoiler alert, much of the information on these topics is not disclosed in the financial statements.
<h3><strong>CAQ Releases the Fall 2025 Audit Partner Pulse Survey</strong></h3>
The <a href="https://www.thecaq.org/audit-partner-pulse-survey?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">Fall Audit Partner Pulse Survey</a> results are here! Fielded partly during the federal government shutdown, the survey provides a uniquely informed view of the U.S. business climate. Our findings confirm a significant shift toward economic pragmatism, as pessimism dropped substantially from 44% to 22%.

The risk landscape has also shifted. Regulatory ambiguity (54%) and trade tensions (53%) have now displaced recession fears as the top economic risks identified by audit partners. Reflecting this cautious environment, top priorities for public companies observed by audit partners are financial performance and cost management, with strategic AI investments ranking closely behind. In response to this focus on efficiency, companies are proactively increasing disclosures on business strategy, financial performance, and AI integration.

<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 Fraud Deterrence and Detection</strong></h3>
<img class="alignright" src="https://go.thecaq.org/l/834983/2025-12-03/3skjl6/834983/1764786829U4yRL2yn/Andi_McNeal_2025.jpg" alt="" width="150" height="150" align="left" border="0" />This month, I am pleased to feature Andi McNeal, Chief Training Officer at the <a href="https://www.acfe.com/">Association of Certified Fraud Examiners (ACFE)</a>. I have had the privilege of working with Andi these last two years in the Anti-Fraud Collaboration. Andi’s commitment and passion for our profession and the work of anti-fraud professionals is so inspiring. I am so pleased I got to ask her about her career and the work of the ACFE.

<em><u>What makes you passionate about your career as an auditor and the work you do at the Association of Certified Fraud Examiners?</u></em>

That’s an easy one—it’s 100% the people. I started my career thinking I’d probably change jobs every few years because I tend to crave new adventures so much. But then I found myself at ACFE, working with people all over the world who are so dedicated to combatting fraud in all its forms and to promoting integrity and ethics in all they do, and I’ve been hooked ever since. My 21+ years at ACFE have been filled with meeting and learning from so many inspirational individuals—from our amazing members to world-renowned experts to some of the best coworkers on the planet—which continuously inspires me and fuels my passion for the work we do on a daily basis.

<em><u>International Fraud Awareness Week turned 25 years old this month. What is Fraud Week, and why is it important to the profession? </u></em>

International Fraud Awareness Week was established by the ACFE in 2000 as a dedicated time to raise awareness about fraud. Our research shows that employee tips are the top way that frauds are detected, and we know that raising awareness among those on the frontline greatly improves our fraud prevention and detection efforts. During Fraud Week, business leaders and anti-fraud professionals are encouraged to proactively take steps to minimize the impact of fraud by promoting anti-fraud awareness and education among their employees and the general public. To support them in doing so, the ACFE offers resources, events, and the opportunity for organizations and individuals to register as Official Supporters of Fraud Week to demonstrate their commitment to preventing and detecting fraud.

<em><u>As the newest partner in the Anti-Fraud Collaboration, what motivated the ACFE to join the AFC? </u></em>

We’ve been familiar with the great work the AFC does for quite a while, including how their mission overlaps significantly with that of the ACFE. So, the invitation to join the AFC as a partner provided a way to formally align the work both organizations were already doing and combine our efforts to better support the broader anti-fraud profession. We’ve been extremely proud of the initiatives we’ve been a part of so far as an AFC partner, and we’re looking forward to even more collaboration to improve our constituents’ fraud prevention and detection initiatives.

<u><em>What advice do you have to my readers in the fight against fraud? </em></u>

While AI and other technological advances mean we fraud fighters must keep upping our tech game, it’s important to remember that, at its heart, fraud is a human problem, and it requires human solutions. To effectively combat it, we need to keep our judgment and skepticism sharp, listen to and learn from the people involved, and incorporate psychological and behavioral considerations into our anti-fraud efforts—all things that humans still do better than technology can.

<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>AICPA &amp; CIMA Conference on SEC and PCAOB Developments</strong></h3>
AICPA &amp; CIMA Conference on SEC and PCAOB Developments
In December, our CEO, Julie Bell Lindsay, will be moderating a key session at the annual <a href="https://www.aicpa-cima.com/cpe-learning/conference/aicpa-conference-on-current-sec-and-pcaob-developments">AICPA &amp; CIMA Conference on SEC and PCAOB Developments</a>. The session will feature SEC Chair Paul Atkins and Chief Accountant Kurt Hohl. This highly attended event offers a great opportunity to gain insight into the year's biggest accounting, auditing, and regulatory developments directly from the officials who developed the standards. Additionally, the Anti-Fraud Collaboration (AFC) will be hosting a panel discussion during the conference to highlight the AFC resources available to auditors and company management in the fight against fraud.

I hope to see you there!
<h3><strong>CAQ Hosts External Auditor Assessment Tool Webinar</strong></h3>
In November, the CAQ and the National Association of Corporate Directors hosted <a href="https://www.thecaq.org/event/event-external-auditor-assessment?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">a webinar</a> on how audit committees and auditors can use our updated 2025 External Auditor Assessment Tool to maximize the evaluation process. My colleague, Vanessa Teitelbaum, Senior Director of Professional Practice, participated and shared guidance on how a robust, two-way dialogue can elevate the effectiveness of the auditors and audit committees. Watch <a href="https://www.thecaq.org/event/event-external-auditor-assessment?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">the takeaways</a>.
<h3><strong>CAQ at the Axios BFD Summit</strong></h3>
On November 18, our CEO, Julie Bell Lindsay, participated in the Axios BFD Summit in New York City. The event brought together the power players and focused on the strategies behind the year's biggest deals in tech, finance, and M&amp;A. <a href="https://www.youtube.com/live/t647EWQst5A?si=IGutVjcr5O95YLa0&amp;t=2850">In her conversation</a>, Julie reinforced that assurance acts as the critical anchor in volatile markets, providing independent verification that cuts through market confusion.

Julie's message underscored that the foundation of trust must now expand to cover material risks across the entire corporate reporting package. By ensuring the reliability of disclosures in these emerging areas, audits function as the trust infrastructure that keeps American capital markets the strongest and most reliable in the world.

Here at the CAQ, we will continue to share resources for the profession and highlight <a href="https://www.thecaq.org/AuditEffect?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider&amp;utm_content=November">how auditors build the foundation of trust</a> in the capital markets.

&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 | November 2025

Since 2014, the Center for Audit Quality (CAQ), in partnership with Audit Analytics – an Ideagen solution, has analyzed public company audit committee disclosures of companies in the Standard & Poor’s (S&P) Composite 1500 (S&P 1500), which is comprised of...

Since 2014, the Center for Audit Quality (CAQ), in partnership with Audit Analytics – an Ideagen solution, has analyzed public company audit committee disclosures of companies in the Standard & Poor’s (S&P) Composite 1500 (S&P 1500), which is comprised of the S&P 500 large-cap companies (S&P 500), the S&P MidCap 400 (S&P MidCap), and the S&P SmallCap 600 (S&P SmallCap). 


Audit Committee Transparency Barometer

Publications

Welcome to another edition of Capital Markets Pulse, a monthly newsletter from the Center for Audit Quality that brings you insights, resources, and tools on the latest issues impacting the capital markets.

I hope everyone had a lovely Thanksgiving! I was...

<img class="aligncenter wp-image-13866" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_JBL_1200x400_600x200_FINAL_Website.png" alt="Capital Markets Pulse with Julie Bell Lindsay" width="650" height="163" />

<strong>Welcome to another edition of Capital Markets Pulse</strong>, a monthly newsletter from the Center for Audit Quality that brings you insights, resources, and tools on the latest issues impacting the capital markets.

I hope everyone had a lovely Thanksgiving! I was grateful to spend time with family and friends in Ohio, and thankful for the dedicated CAQ team and the public company audit profession's continued diligence in strengthening trust and confidence in capital markets.

In November, our work continued to be centered on reinforcing trust. We hosted the Fraud Forum as part of Fraud Awareness Week, and I spotlighted the important role of auditors in the capital markets at the <a href="https://axiosbfdsummitnewyork2025.splashthat.com/">Axios BFD Summit</a> in New York City.

As we near the end of the year, it is critical for the profession to remain alert for any changes in the regulatory landscape. Here at the CAQ, we will continue to share relevant updates as we enter the end of Q4.

Read on for the latest updates and insights from the profession.

<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 here</a> so that you never miss a public company auditing update. </em> ​​​

<img class="aligncenter wp-image-13867" src="https://thecaq.wpenginepowered.com/wp-content/uploads/2023/06/Header_JBL_1200x400_600x200_RADAR-1024x256.png" alt="On my radar" width="600" height="150" />
<h2>Profession Updates</h2>
Although the PCAOB’s day-to-day operations were largely unaffected by the federal government shutdown, regulatory activity slowed during the period, resulting in fewer formal updates from our standard-setters and oversight bodies. However, the accounting profession hasn't been standing still.

Firms and professional organizations continue their steadfast work on behalf of the public interest, refining best practices and strengthening internal controls, while actively preparing for what's ahead: a new PCAOB board and an SEC poised, by all accounts, to pursue significant regulatory reform.
<h2>CAQ Updates</h2>
<h4><strong>CAQ Observes International Fraud Awareness Week</strong></h4>
In November, we marked <a href="https://www.thecaq.org/anti-fraud?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">International Fraud Awareness Week</a>, which served as a vital reminder for all participants in the financial reporting community to strengthen fraud deterrence and detection measures. To drive this dialogue, the CAQ, in partnership with the <a href="https://antifraudcollaboration.org/">Anti-Fraud Collaboration (AFC)</a>, hosted our second annual Fraud Forum to spotlight the current and future state of the fraud risk landscape.

The conversation centered on a fundamental truth: preventing fraud begins long before red flags emerge. It starts with building a corporate culture rooted in trust and accountability. Our keynote speaker, Tyler Schultz — the Theranos whistleblower who demonstrated extraordinary courage in exposing the truth even when it seemed everyone, including his own family, was against him — exemplified why empowering employees to speak up is critical. When employees at every level feel empowered to speak up and ask questions, organizations create their strongest defense against fraudulent activity. In today's complex capital markets environment, a culture of vigilance paired with continuous learning is essential to protecting stakeholder value and market integrity.

The CAQ will share more takeaways from the Fraud Forum on our website in the coming weeks.
<h4><strong>Axios BFD Summit: Reinforcing Trust in a Volatile Market </strong></h4>
In November, I took the stage at Axios’ BFD Summit in New York City. In our conversation, Nicholas Johnston and I talked about the role <a href="https://www.thecaq.org/AuditEffect?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">trust plays in capital markets</a>. While the event focused on finance and dealmaking, my message was clear: investors rely on reliable financial information to make decisions, and the public company audit profession helps ensure that information is trustworthy.

In today's volatile and complex economy, assurance acts as a critical anchor, giving investors independent verification of corporate data that cuts through market confusion. Increasingly, the foundation of trust from assurance extends beyond the balance sheet to areas like <a href="https://www.thecaq.org/rota-ai?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">AI</a>, cybersecurity, and climate risks. For investors, these areas represent material risks that demand the same rigor in verification as financial statements. Ultimately, quality audits are not just compliance checkboxes, but rather the trust infrastructure that keeps American capital markets the strongest and most reliable in the world.

Watch my conversation with Nicholas Johnston <a href="https://www.youtube.com/live/t647EWQst5A?si=IGutVjcr5O95YLa0&amp;t=2850">here</a>.
<h4><strong>CAQ Hosts External Auditor Assessment Webinar</strong></h4>
Here at the CAQ, we know that an effective and informed external auditor evaluation is a core responsibility of the audit committee.

In November, the CAQ and the National Association of Corporate Directors hosted <a href="https://www.thecaq.org/event/event-external-auditor-assessment?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">a webinar</a> on how audit committees and auditors can use our updated 2025 External Auditor Assessment Tool to maximize the evaluation process. My colleague, Vanessa Teitelbaum, Senior Director of Professional Practice, joined a panel of experts and shared guidance on how a robust, two-way dialogue can enhance the effectiveness of the auditors and audit committees. If you missed the live webinar, you can watch <a href="https://www.thecaq.org/event-external-auditor-assessment?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">the takeaways on the CAQ website</a>.
<h4><strong>Findings from the Fall 2025 Audit Partner Pulse Survey</strong></h4>
The <a href="https://www.thecaq.org/audit-partner-pulse-survey?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">Fall 2025 Audit Partner Pulse Survey</a> is here! Our bi-annual survey captures the unique vantage point of audit partners and provides essential insights into how companies are navigating the economic and regulatory landscape. The results reveal a fascinating tension between caution and strategic adaptation. After a period of concern earlier in the year, economic sentiment is stabilizing, with pessimism dropping significantly. This tempered confidence is not translating into pure growth incentives; instead, companies are focusing on resilience-building and risk mitigation strategies.

The unpredictability of the environment is driving strategy, as regulatory ambiguity and trade tensions now top the list of risks identified by audit partners. In response, companies are proactively expanding disclosures in key areas, including business strategy (61%), financial performance (58%), and AI integration (48%). This inward-looking recalibration also underscores an ongoing shift toward cost discipline, with many companies reportedly pursuing a reduction in headcount (58%) and implementing tighter hybrid work policies.

However, within this landscape of caution, AI stands apart as the strategic exception. Even as organizations work to maintain or cut costs across nearly every function, AI investments continue to climb, viewed less as discretionary spending and more as essential for long-term efficiency and resilience. As AI embeds deeper into core business functions, the need for robust governance and assurance intensifies. This is where <a href="https://www.thecaq.org/rota-ai?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">auditors come in</a> to provide human oversight and elevate investors' trust in this advanced technology.

As we look ahead, organizations need to balance pragmatism with strategic adaptation, pursuing innovation while effectively maintaining controls and transparency that stakeholders require. I encourage you to unpack the full results.
<h4><strong>The Role of the Auditor: Professional Skepticism </strong></h4>
In partnership with the Anti-Fraud Collaboration, the CAQ released <a href="https://antifraudcollaboration.org/rota-fraud-exercising-and-maintaining-professional-skepticism/">The Role of the Auditor: Exercising and Maintaining Professional Skepticism</a>. The report emphasizes that while auditing standards mandate the exercise of skepticism, their effective use is inherently judgment-based and situational. Auditors must employ the skepticism continuum to maintain a questioning mindset throughout all phases of the audit.

To stay alert in the fight against fraud, our collective focus must be on cultivating a culture that encourages and rewards this critical mindset, alongside training that equips auditors to recognize when something requires further attention. Furthermore, continuous learning and adaptability are essential, particularly as auditors must understand the changes and risks brought on by advancements in technology like AI.

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>.
<h4><strong>S&amp;P 500 Analysis: Assurance Drives Credibility in New Disclosures</strong></h4>
The latest <a href="https://www.thecaq.org/sp500-companies-10K-analysis?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">Analysis of Information in S&amp;P 500 Companies' 10-Ks</a> confirms that corporate reporting has fundamentally expanded to encompass critical, fast-moving areas like <a href="https://www.thecaq.org/sp-500-and-ai-reporting?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">artificial intelligence (AI)</a>, <a href="https://www.thecaq.org/sp-500-and-digital-asset-reporting?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">digital assets</a>, and <a href="https://www.thecaq.org/sp-500-10k-climate?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">climate-related information</a>. This integrated research underscores the strong investor demand for transparency in these frontiers of corporate data: for instance, 99% of S&amp;P 500 companies reported sustainability-related information in 2023, and our analysis of AI disclosures found that 72% of companies now disclose at least one material AI risk. These metrics show that while companies manage regulatory ambiguity, they are proactively engaging stakeholders on the risks and opportunities presented by emerging technology and climate issues.

In this new landscape, the role of auditors is more critical than ever, as we provide the confidence necessary for investors to act on this new data. Our research shows that most companies obtain assurance or verification over their sustainability metrics, reaching 73% of reporting companies in 2023.

Here at the CAQ, we all know that by leveraging our rigorous requirements for independence and professional skepticism, the audit profession enhances <a href="https://www.thecaq.org/AuditEffect?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">the reliability and credibility</a> of the entire corporate disclosure package, ensuring these evolving reporting areas are anchored in trust.
<h4><strong>Explore the AFC's Q3 Newsletter</strong></h4>
In a changing technological landscape, it is important to stay ahead of fraud risks. The Anti-Fraud Collaboration’s Q3 newsletter includes resources for auditors, audit committees, and management to manage fraud risks, and anti-fraud updates from AFC members. <a href="https://antifraudcollaboration.org/afc-newsletter-october-2025/">Read on</a> for updates you might have missed.
<h2>Accounting+/Talent Update</h2>
<h4><strong>EVERFI Events at Grant Thornton and Deloitte</strong></h4>
Earlier this month, students from the High School of Economics and Finance visited Deloitte and Grant Thornton's New York offices to explore careers in accounting. They connected with industry professionals, participated in career activities, delivered elevator pitches, and one student at each event received a $5,000 scholarship.

As the accounting profession continues to face a talent shortage amid growing complexity in our capital markets, expanding the pipeline has never been more critical. Programs like these strengthen our financial ecosystem by building a more diverse and skilled workforce for the future.

<a href="https://www.thecaq.org/aia-bridging-the-gap?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=capital%20markets%20pulse">Learn more</a> about how we’re bridging the gap and attracting new talent to the profession.
<h4><strong>Football and Accounting</strong></h4>
<a href="https://www.joinaccountingplus.com/">Accounting+</a> and the Pittsburgh Steelers hosted the second Steelers Showcase event of the 2025-2026 school year at the end of October, where representatives from CAQ member firms joined students from Penn Hills High School to “Crack the Case” and solve a fictional fraud scenario.

The activity and discussion, emceed by Steelers legend Chris Hoke, was followed by a tour of Acrisure Stadium and a special trip to the Steelers Pro Shop. We look forward to hosting our final event of the school year in December.

<hr />

<h3 style="text-align: center;">Julie Bell Lindsay</h3>
<p style="text-align: center;"><em>Chief Executive Officer, CAQ</em></p>

The Center for Audit Quality

Audit Committee Transparency Barometer

2025

Audit Quality

Independence

Corporate Reporting Trends

Anti-Fraud

ESG

Future Talent

Corporate Reporting Trends

Trending Resources

Stay Connected.