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

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

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

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

The digital asset ecosystem is rapidly evolving, and trust is critical in shaping the future of these innovations.

While the use of digital assets at U.S. public companies remains relatively limited, their prevalence in certain segments of the financial system is...

The digital asset ecosystem is rapidly evolving, and trust is critical in shaping the future of these innovations.

While the use of digital assets at U.S. public companies remains relatively limited, their prevalence in certain segments of the financial system is accelerating. In an analysis of 10-Ks, the CAQ found that <a href="https://www.thecaq.org/sp-500-and-digital-asset-reporting">9% of S&amp;P 500</a> companies mentioned digital asset-related information in their 2024 filings (filed in 2025). Our research has indicated that more than half of those companies are in the financial services sector; the remainder span across industries as companies are beginning to explore new opportunities with digital assets.

More recently, in our <a href="https://www.thecaq.org/audit-partner-pulse-survey">Fall 2025 Audit Partner Pulse Survey</a>, 22% of audit partners indicated that companies in their primary industry sector have exposure to digital assets (up from 11% reported in <a href="https://thecaq.wpenginepowered.com/wp-content/uploads/2025/06/caq_audit-partner-pulse-survey-spring-2025_2025-06.pdf">Spring 2025</a>). We are also seeing an increasing number of digital asset exchanged-traded funds (ETFs), reflecting growing interest in this asset class from investors.

At the same time, regulatory frameworks for digital assets are still emerging. Congress recently passed legislation establishing a regulatory framework for stablecoins (the GENIUS Act) and is now focused on passing a broader digital asset market structure bill. Regulatory agencies, like the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), have prioritized providing clarity regarding their oversight of digital assets, including the application of securities law to specific types of digital asset transactions.

This is all happening at a time of price volatility in the digital asset markets, highlighting the importance of market participants having the information that they need to make informed investment decisions. At the CAQ, we know that auditors have a critical role to play in the flow of reliable information to stakeholders for decision-making. Our latest publication, <a href="https://www.thecaq.org/rota-digital-assets"><em>The Role of the Auditor in Digital Assets: Present and Future</em></a>, explores the current digital assets landscape, why auditors are well-positioned to meet stakeholder needs, and what the future of trust could look like.

[custom_quote text="22% of audit partners indicated that companies in their primary industry sector have exposure to digital assets."]
<h3><strong>Challenges in an Evolving Ecosystem</strong></h3>
As the digital asset ecosystem matures, so are the business models of companies engaging with digital assets. The use of digital assets varies from company to company and many different types of companies support a robust digital asset ecosystem, ranging from companies that hold digital assets for investment purposes, companies that participate in digital asset mining and staking activities, companies that issue digital assets (like stablecoins), and companies that provide digital asset-related services including providing custody solutions, operating exchanges, and providing staking as a service. Additionally, we are seeing some financial entities begin to explore tokenization of financial instruments.

Companies face unique risks depending on their use of digital assets, but there are some universal challenges that cut across the digital asset ecosystem. In our <a href="https://www.thecaq.org/audit-partner-pulse-survey">Fall 2025 Audit Partner Survey</a>, audit partners identified regulatory uncertainty and a lack of expertise as key challenges facing companies that use digital assets for investment, operational, or transactional purposes. Additionally, we continue to see focus from digital asset market participants on transparency, including the information needs of investors, customers, and other stakeholders, and safeguarding of digital assets.

As the digital asset ecosystem continues to mature, it will be important for companies to consider how to provide increased trust and transparency for stakeholders on these key topics. As companies explore enhanced disclosure, public company auditors can play an important role in enhancing the reliability of information and mitigating potential information imbalances between external and internal stakeholders.

Audits and attestation engagements are already well-established mechanisms for building trust in financial and non-financial information reported by companies, and these services can be extended to digital asset market participants.

[custom_quote text="Companies face unique risks depending on their use of digital assets, but there are some universal challenges that cut across the digital asset ecosystem."]
<h3><strong>The Role of the Auditor</strong></h3>
Auditors are long-standing experts in verifying information reported by public companies, and their dedication to bringing trust to decision-useful information is why the U.S. is the gold standard for audit quality.

Auditors have a proven history of applying their rigor and expertise beyond financial reporting to emerging areas of our economy. Increasingly, auditors are being called upon to provide assurance on emerging topics like climate and cybersecurity.

In the digital asset ecosystem, auditors are already playing an important role in enhancing trust in company-reported information. One example of this is the requirement in the GENIUS Act for permitted payment stablecoin issuers to obtain an examination, performed by an auditor, of their monthly reserve reporting.

Auditors bring several unique strengths:
<ul>
 	<li><strong>Deep expertise in understanding business processes. </strong>Auditors are skilled at understanding various business processes and assessing and responding to risks within those processes.</li>
 	<li><strong>Experience in reporting on adherence to standards and frameworks.</strong> Auditors have extensive experience reporting on management’s assertions about compliance with various standards and frameworks.</li>
 	<li><strong>Compliance with independence and rigorous professional standards. </strong>Auditors follow strict independence rules and adhere to continuing professional education, ethics, and experience requirements.</li>
</ul>
Just as they verify a company’s financial information, auditors' tried-and-true assurance brings clarity to emerging disclosure areas impacting the capital markets.

[custom_quote text="Auditors have a proven history of applying their rigor and expertise beyond financial reporting to emerging areas of our economy."]
<h3><strong>The Future of Trust</strong></h3>
Digital asset attestation engagements continue to evolve to meet stakeholder needs. As companies and retail customers increasingly become involved in the digital asset ecosystem and engage the services of digital asset service providers, those customers are seeking greater trust and transparency in service providers’ operations.

Currently, several prominent digital asset companies that provide custody services to customers obtain Service Organization and Controls (SOC) 1 Type 2 reports, which are available to institutional customers and provide information relevant to a customer’s system of internal control. However, these reports aren’t available to individual retail customers. As the digital asset ecosystem continues to expand, there may come a point when retail customers desire greater trust and transparency about a digital asset service provider’s internal controls. At some point in the future, we may see new types of attestation engagements emerge to meet this need.

The profession is ready to engage with standard-setters, companies, and users of attestation reports to ensure that future attestation engagements deliver a clear and reliable picture of digital asset activities. It is important that future attestation engagements are clearly defined and that there is an appropriate framework enabling the performance of consistent and high-quality engagements.

This is the auditor's role: applying decades of expertise, rigor, and independence to emerging topics, contributing to continued innovation and growth in the U.S. economy. The CAQ will continue to monitor the evolving digital asset landscape and the profession’s role in building trust in these innovations.

[custom_quote text="The profession is ready to engage with standard-setters, companies, and users of attestation reports to ensure that future attestation engagements deliver a clear and reliable picture of digital asset activities."]

<strong><em>Explore the Full Resource:</em></strong><em> To see our full analysis of the evolving digital asset landscape,</em> <a href="https://www.thecaq.org/rota-digital-assets"><em>download the report here</em></a><em>.</em>

Bringing Trust to the Digital Asset Ecosystem

Emerging Reporting Areas

Blog Post

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Headshot_Barton_Trevor

Trevor Barton

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

Trust is the foundation of well-functioning capital markets. Investors rely on independent, high-quality audits to inform confident decision-making. At a time when business models, corporate disclosures, and financial reporting processes are being reshaped by rapid technological change, including advances in...

Trust is the foundation of well-functioning capital markets. Investors rely on independent, high-quality audits to inform confident decision-making. At a time when business models, corporate disclosures, and financial reporting processes are being reshaped by rapid technological change, including advances in artificial intelligence (AI), the role of independent assurance has never been more important. Our focus is simple: as innovation accelerates across the business landscape, we’re focused on assessing the governance and control environment around AI-enabled processes that affect financial reporting.

Innovation can create value, but it can also introduce new risks. As AI becomes increasingly embedded in financial reporting, internal controls, and decision-making, investors are asking how these technologies are governed, validated, and monitored. Enhancing investor confidence in this environment requires assurance, professional skepticism, and clarity on how these innovations are designed and used.
<h3><strong>Audit quality in a changing risk landscape</strong></h3>
The audit should evolve alongside capital markets. Today, that evolution is accelerating. As companies begin to use AI to improve efficiency and insight, there is a heightened need for strong governance, robust controls, and clear accountability. That means spending more time understanding how AI-enabled processes are governed and controlled when they affect financial reporting and disclosures. This includes evaluating controls over data inputs, access, and change management, and how AI-generated outputs are reviewed and used in reporting.

It is the auditor’s responsibility to challenge assumptions, test controls, assess whether risks are appropriately identified and disclosed, and demonstrate ethical leadership. Independent audits are designed to bring clarity to what’s material to investors. By applying consistent standards, disciplined processes, and professional judgment, auditors inform investors’ assessments on business fundamentals—even as those fundamentals are increasingly shaped by sophisticated technologies.

[custom_quote text="Independent audits are designed to bring clarity to what’s material to investors."]
<h3><strong>Leveraging technology to strengthen assurance</strong></h3>
Advances in audit technology are enhancing our ability to deliver high-quality assurance. For example, advanced analytics can allow teams to assess broader populations of data and focus procedures where signals indicate higher risk—while auditors remain responsible for the conclusions. At Deloitte, we continue to invest in these capabilities, while maintaining a clear principle: technology enhances the audit, but it does not replace professional judgment. Human oversight, independence, and skepticism remain essential. Our professionals are trained to understand both the potential and the limitations of AI, endeavoring that its use supports audit quality.

Equally important is how we govern our own use of AI. We have established a <a href="https://www.deloitte.com/us/en/what-we-do/capabilities/applied-artificial-intelligence/services/ethics-of-ai-framework.html">Trustworthy AI<sup>TM</sup> framework</a> that emphasizes transparency, reliability, security, and accountability. These principles guide how we deploy AI across our Audit &amp; Assurance business and reinforce our commitment to acting in the public interest.
<h3><strong>Transparency, independence, and accountability</strong></h3>
Investor trust is strengthened when audits are independent, transparent, and consistently executed. Public company audits are conducted within a regulated and highly scrutinized environment. This reinforces accountability, comparability, and confidence in the information investors rely on across market cycles. Strong dialogue with audit committees is also essential given management’s responsibility to govern AI-related risks.

Transparency is a key part of this equation. Deloitte’s <a href="https://www.deloitte.com/us/en/services/audit-assurance/articles/transparency-report.html">Transparency Report</a> provides insight into how we manage quality, risk, and independence, as well as how we invest in training, technology, and governance. This openness reflects the reputational stake auditors have in maintaining credibility with investors, audit committees, and regulators—and why continuous improvement is essential.

[custom_quote text="Strong dialogue with audit committees is also essential given management’s responsibility to govern AI-related risks."]
<h3><strong>Building confidence for the future</strong></h3>
As markets evolve and uncertainty persists, the value of independent assurance becomes even clearer.

Innovation and assurance are not competing forces; they are complementary. When new technologies like AI are implemented thoughtfully and subjected to rigorous oversight, they can strengthen both financial reporting and the audit itself. The result can lead to higher-quality information, greater transparency, and increased investor confidence.

At Deloitte, we remain committed to advancing audit quality, embracing responsible innovation, and upholding the trust that underpins the capital markets.

&nbsp;

<hr />

<em>This publication contains general information only and Deloitte is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.</em>

<em>As used in this document, “Deloitte” means Deloitte &amp; Touche LLP, a subsidiary of Deloitte LLP. Please see <a href="http://www.deloitte.com/us/about">www.deloitte.com/us/about</a> for a detailed description of our legal structure. Certain services may not be available to attest clients under the rules and regulations of public accounting.</em>

<em>Copyright © 2026 Deloitte Development LLC. All rights reserved.  </em>

Enhancing Investor Confidence in an Era of AI-Driven Innovation

Artificial Intelligence

<strong><span style="color: #1e376c;"><em>Follow Julie on Twitter</em></span> <a href="https://twitter.com/JulieBLindsay">@JulieBLindsay</a></strong>

Julie Bell Lindsay is the Chief Executive Officer of the Center for Audit Quality (CAQ), a position she has held since May 2019. As CEO, Julie is responsible for leading the CAQ in fulfilling its mission of championing the public interest in the capital markets by elevating the quality, credibility and transparency of public company audits and the role of assurance in our markets.

Previously, Julie served as a Managing Director and the Deputy Head of Global Regulatory Affairs at Citigroup, a position she began in February 2017. In that role, Julie worked to formulate and execute Citi’s regulatory policy priorities and strategy across the numerous U.S. and international regulatory agencies with oversight over Citi. Julie joined Citi in February 2009 as General Counsel – Capital Markets and Corporate Reporting, where she was the lead internal lawyer responsible for Citi’s public disclosures and global capital markets activities. During this time, she led the internal and external teams in Citi’s $20 billion TARP repayment, involving the then-largest public equity offering in US capital markets history, as well as its $58 billion exchange offers designed to boost Citi’s capital levels post-financial crisis.

Prior to Citi, Julie served as Counsel to Commissioner Cynthia Glassman at the US Securities and Exchange Commission, where she counseled the Commissioner on matters relating to public company disclosure obligations, corporate governance standards, the Sarbanes-Oxley Act of 2002, the PCAOB and FASB, enforcement matters, and issues affecting registered foreign companies. Julie also has securities and public company reporting and governance experience as Counsel and Associate at law firms in Washington, DC and Palo Alto, CA.

Julie graduated from The Ohio State University in 1993 with a BA in political science and received her JD from Vanderbilt School of Law in 1996. She serves as a Member of the Board of Directors of the Foundation for the National Institutes of Health, where she Chairs the Audit and Finance Committee, and as a Member of the Dean’s Advisory Council of the College of Arts &amp; Sciences at The Ohio State University.

Julie Bell Lindsay

Dear Readers,

Each year, I assess where the public company audit profession stands and where it must go next, because market confidence depends on the quality and reliability of corporate reporting and our profession plays a critical role in delivering that...

Dear Readers,

Each year, I assess where the public company audit profession stands and where it must go next, because market confidence depends on the quality and reliability of corporate reporting and our profession plays a critical role in delivering that assurance to investors, board leaders, and policymakers. The past few years brought significant developments on two fronts: a rapid evolution in technology that enables auditors to examine financial information with greater depth and precision, and concerted efforts to modernize regulatory oversight of public company audits after more than two decades under the Sarbanes-Oxley framework. As we look ahead to 2026, we remain anchored in our purpose. While change continues to accelerate, the purpose of the audit as a source of trust remains constant.

In markets characterized by speed, complexity, and information abundance, quality assurance ensures that numbers, narratives, and risk assessments can be relied upon, underscoring the importance of the profession remaining engaged and at the table when policy affecting our capital markets is made. The audit and other forms of assurance are not a formality. They create the trust infrastructure that keeps U.S. capital markets the most resilient and most relied upon in the world.
<h3><strong>The Audit Effect: An Enduring Foundation in Uncertain Times</strong></h3>
The core value of a public company audit becomes most apparent during periods of market volatility. Quality audits provide reassurance precisely because they are consistent and comparable, offering investors and market stakeholders a guiding light when conditions shift. Last year I wrote that audits matter because they create trust, which enables stability and instills confidence. In 2026, that chain matters not only for financial statements, but also for how investors assess the reliability of new forms of company data that increasingly influence valuation and risk.

[custom_quote text="Quality audits provide reassurance precisely because they are consistent and comparable, offering investors and market stakeholders a guiding light when conditions shift."]

<em>“Some of the most careful readers of our audits are our competitors, and the purpose of the assurance process is to make sure they’re relying on information that is as accurate as possible. It’s also to make sure that ill-intentioned people don’t put out bad information, and to ensure that well-intentioned people haven’t made a well-intentioned mistake that changes the way the consumer of that audit would think about the company.”</em>
<h6 style="text-align: right;">- Board Member, CAQ In-depth Interview, Fall 2025</h6>
<h3><strong>The Regulatory Landscape: Collaborating for Stronger Outcomes</strong></h3>
The regulatory environment will continue to evolve, and the goal for 2026 should not be change for its own sake, but change that improves outcomes for investors and strengthens market integrity. A responsive regulatory approach recognizes that audit needs and complexity vary significantly: what works for a mega-cap company and large audit firm may not fit a small-cap issuer with a mid-market audit firm, and auditing standards must be adaptable to both auditing firms and issuer realities. Effective regulation also requires robust stakeholder engagement to understand practical implementation realities, rigorous economic analyses that weigh costs against benefits, and timelines supported by adequate resources so firms can implement new requirements effectively. In 2026, we must focus on finding a balance between standards that are both rigorous and implementable, grounded in evidence and informed by the professionals who conduct audits in the field.

[custom_quote text="The regulatory environment will continue to evolve, and the goal for 2026 should not be change for its own sake, but change that improves outcomes for investors and strengthens market integrity."]
<h3><strong>Emerging Technologies: From Invention to Integration</strong></h3>
The conversation on emerging technologies has moved beyond whether generative artificial intelligence (genAI) belongs in audit work to how firms deploy it with appropriate controls, capabilities, and transparency. In last year's outlook, we noted $6.4 billion in announced AI investments by leading firms, and our <a href="https://www.thecaq.org/sp-500-and-ai-reporting">analysis of AI-related information in S&amp;P 500 companies' 10-Ks</a> found that 90% mentioned AI in their most recent filings. What has become clear is that automation enables auditors to focus more intensively on areas requiring professional judgment, independence, and experience, in turn making audits more rigorous, not more mechanical.

As genAI becomes embedded in business processes across industries, auditors face expanding expectations around assurance over technology-related disclosures, including information about genAI use and, where frameworks emerge, digital assets. This evolution places two responsibilities on assurance providers: first, implement technology that demonstrably improves audit quality; second, communicate that use clearly so investors and other stakeholders understand how audit conclusions were reached. Transparency about methodology is as essential as the methodology itself, and critical to investor confidence.

[custom_quote text="Transparency about methodology is as essential as the methodology itself, and critical to investor confidence."]
<h3><strong>The Talent Pipeline</strong></h3>
Auditing is, at its core, a people profession. While emerging technologies may create some efficiencies, it is without question the need for accountants and auditors will continue. The <a href="https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm">U.S. Bureau of Labor Statistics</a> estimates that employment of accountants and auditors is projected to grow five percent from 2024 to 2034, faster than the average of all occupations, and that approximately 124,200 openings each year, on average, are projected for accountants and auditors over this timeframe. At the same time, stereotypes of what accountants and auditors actually do and where their careers can lead remain a challenge, among other challenges, to attracting students to these fields.

The CAQ has responded to this challenge with Accounting+, which has made significant strides in shifting student attitudes and enhancing interest in the career. Based on ongoing CAQ research, for the first time in 4 years, high school students indicated a decline in perceived barriers to pursuing accounting, including a lack of interest in the field, which has historically been the strongest barrier. Compared to 2022 research, students report an 8-point lift in awareness/familiarity of accounting, and an 18-point lift in interest in accounting. Further, over the course of our strategic partnership with EVERFI, we’ve embedded accounting awareness curricula in over 12,000 schools nationwide. During the 2024-2025 school year, 80% of students said this course showed them accounting careers they did not know about before, and 88% agreed accounting skills are useful to reaching their goals.

The campaign's success demonstrates that when the profession articulates its value proposition – early, clearly and at scale – by emphasizing problem-solving, technology integration, and impact, it resonates with the next generation of accountants and auditors. While this awareness and interest needs to be further translated into actual pipeline growth, Accounting+ has over 70 partners (including over 35 state CPA societies) working together, utilizing Accounting+ messaging, to ensure the widest net is cast in raising awareness and debunking misperceptions about accounting and auditing, We are proud to spotlight this profession and the vital role it plays in every business, in every industry, and our capital markets.

[custom_quote text="During the 2024-2025 school year, 80% of students said this course showed them accounting careers they did not know about before, and 88% agreed accounting skills are useful to reaching their goals."]
<h3><strong>What This Means in Practice</strong></h3>
Advancing the profession in 2026 requires us to lead, not follow. Auditors must take a seat at the table with standard setters and investors alike, demonstrating value and shaping how new technologies strengthen markets and instill confidence in financial reporting and corporate disclosures. Looking beyond the headlines, investors and audit committees will continue to press company leadership and auditors on how companies validate AI outputs that affect financial reporting and what assurance exists over the data driving performance narratives. Regulators can support better outcomes through broad stakeholder engagement and by testing whether proposed requirements are practical across different company – and audit firm – sizes and industries. When the profession and oversight bodies operate from shared facts and clear goals, standards become implementable and effective. That is how trust is earned and sustained.

The profession stands ready for what comes next because its mission remains constant: strengthening trust in capital markets. This requires steady collaboration across the corporate reporting ecosystem, and success can only be achieved with companies, investors, auditors, and regulators working together. The profession's track record of independence, reliability, and transparency provides the foundation. The commitment to stay engaged, to lead on emerging challenges, and to protect the public interest provides the path forward.

Thank you for engaging with the Center for Audit Quality and for supporting public company auditors. To stay up to date on our work, visit <a href="http://www.thecaq.org">thecaq.org</a> or follow us on <a href="https://www.linkedin.com/company/2859773">LinkedIn</a>.

[custom_quote text="The profession stands ready for what comes next because its mission remains constant: strengthening trust in capital markets."]

Julie Bell Lindsay,
Chief Executive Officer, CAQ

2026 Audit Profession Outlook | A Post-Disruption Era: Trust, Transparency, and the Audit Profession

Auditors

Audit Committee

Investors

Auditor Independence

Talent

Company Management

Audit Quality

Vanessa Teitelbaum, CPA, is Senior Director, Professional Practice at the Center for Audit Quality. She joined the CAQ in 2016 and advocates for stakeholders in the audits of public companies.

As an in-house expert and resource on auditing and accounting practice issues, Vanessa leads task forces comprised of audit partners and technical experts from the public company audit profession related to proposed standards and other current issues facing the profession. Projects have included development of the CAQ’s <em>Audit Quality Disclosure Framework</em>, <em>Preparing for the New Credit Losses Standard: A Tool for Audit Committees</em>, and the <em>External Auditor Assessment Tool</em>, among other publications. Vanessa has facilitated responses to proposed standards and regulations related to quality management, supervision of other auditors, quarterly reporting, the accelerated filer definition, and independence.

Before joining the CAQ, Vanessa served as an audit senior manager at PricewaterhouseCoopers and Dixon Hughes Goodman, leading audit teams of both large and midsize companies in a variety of industries, including technology, manufacturing, and financial services. Vanessa has over 15 years of audit experience, specialized in SEC financial reporting, technical accounting, and internal control matters.

Vanessa is a Certified Public Accountant in Maryland. She holds a bachelor of arts in Asian studies from Williams College and a master of business administration in accounting and finance from New York University Stern School of Business.

Vanessa Teitelbaum, CPA

A structured annual evaluation of the external auditor helps audit committees maintain audit quality, safeguard market confidence, and bolster communication between both parties.

By conducting a disciplined assessment of the external auditor’s independence, technical proficiency, and overall performance, audit committees reinforce...

A structured annual evaluation of the external auditor helps audit committees maintain audit quality, safeguard market confidence, and bolster communication between both parties.

By conducting a disciplined assessment of the external auditor’s independence, technical proficiency, and overall performance, audit committees reinforce a critical safeguard. A high-quality audit is a shared responsibility that depends on robust, constructive dialogue between the <a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/online-exclusives/2025/q3-2025/pcaob-inspection-audits/">external auditor</a> and the <a href="https://www.nacdonline.org/all-governance/governance-resources/committees-and-roles/audit-committee/">audit committee</a>.

“The evaluation and the appointment of the external auditor is one of the audit committee’s key responsibilities and it's important to follow a consistent process year over year,” said Sara Grootwassink Lewis, a board member at Weyerhaeuser Co., Freeport-McMoRan, PwC, and Healthpeak Properties, and a <a href="https://www.thecaq.org/audit-committee-council">Center for Audit Quality (CAQ) Audit Committee Council member</a>, at a November 2025 webinar on the topic. As such, implementing a formalized assessment is an effective way to facilitate essential conversations and an <a href="https://www.thecaq.org/wp-content/uploads/2025/10/caq_external-auditor-assessment-tool-for-audit-committees_2025-10.pdf">important tool</a> in establishing a consistent review process.
<h3><strong>Having a Constructive Dialogue </strong></h3>
The assessment is a powerful source of constructive feedback and should encompass the following four domains to ensure the evaluation is comprehensive and addresses the core drivers of audit quality:
<ul>
 	<li><strong>The engagement team.</strong> Assess the expertise, depth, and efficiency of the specific audit team.</li>
 	<li><strong>The audit firm.</strong> Evaluate the firm’s approach to promoting and monitoring overall audit quality.</li>
 	<li><strong>Communication and interaction.</strong> Review the effectiveness, timeliness, and transparency of communications with the audit committee.</li>
 	<li><strong>Independence and professional skepticism. </strong>Ensure that the external auditor maintains an unwavering <a href="https://prod.nacdonline.org/all-governance/governance-resources/governance-research/director-faqs-and-essentials/oversight-of-the-independent-auditor/?_gl=1*2u1tar*cleng_au*MTgyMTE4MjAwMS4xNzY0NTkyOTk1*_gcl_au*MTU0NTc0NTUxLjE3NTc5NTA2NzM.*_ga*NzY2Mjk0Nzc1LjE3NTYzMTc1MTU.*_ga_B0LJ5KFK1T*czE3NjUzNzIyODAkbzEwMCRnMSR0MTc2NTM3MjI5OCRqNDIkbDAkaDA.">position of independence</a>, which is vital for investor confidence.</li>
</ul>
<h3><strong>The Keys to Partnership</strong></h3>
The quality of the audit is directly tied to the strength of the relationship between the external auditor and the audit committee. While the annual assessment is important, effective auditor–audit committee relationships rely on communication that extends well beyond the annual cycle. One of the most critical elements is having a proactive audit partner, or someone who reaches out as an issue emerges rather than waiting for the next scheduled touchpoint.

“As long as it’s not in the rough, I can accept that. But the audit committee needs to know if it wasn’t right down the middle of the fairway. You need to talk about those things that might kick it over into the rough. We, as audit partners, need to have the courage to take a point of view. And we shouldn’t surprise management with that point of view,” said Stephen Parker an assurance partner in PwC’s Governance Insights Center, on the webinar.

It is also important to maintain connections with the firm’s broader leadership, not just the core audit team. This broader engagement brings visibility into emerging and evolving issues, supports stronger judgment, and reinforces a culture of openness. Ultimately, these relationships work best when built on a foundation of transparency and consistent, candid communication.

Key operational practices that can help strengthen this important partnership include:
<ul>
 	<li><strong>Going beyond the meeting.</strong> Communication should extend beyond the quarterly meetings of the audit committee.</li>
 	<li><strong>Starting engagement partner succession planning early.</strong> It is important to start the <a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/directorship-winter-2025-issue/is-it-time-for-a-new-audit-firm/">partner selection process</a> well before the required five-year rotation. As Karen Golz, audit committee chair at Analog Devices and iRobot Corp., noted in the CAQ webinar, this process should begin “approximately 18 to 20 months before the lead engagement partner is required to rotate off the engagement,” and the audit committee should ask for “a minimum of three qualified candidates.” It is also important that “the firm does not select the partner,” and that “the audit committee selects the partner,” she said.</li>
 	<li><strong>Addressing sensitive topics.</strong> When facing complex or sensitive issues, the audit committee can expect the audit partner to be candid.</li>
</ul>
Ultimately, audit committees should view the external auditor as a strategic partner. The real value of the engagement comes from the quality of insights the auditor provides and the benefits of an independent perspective that helps the committee make more informed decisions and improve overall efficiency.

By fully embracing a structured, continuous, and constructive assessment process, audit committees can strengthen their governance role, fulfill their fiduciary duty, and ensure the highest levels of audit quality, thereby enhancing confidence in the capital markets. This work is more important than ever, especially as the <a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/online-exclusives/2024/q4-2024/how-audit-committees-can-get-involved-with-genai-adoption/">technological landscape</a> continues to change how organizations operate.

As Mike Seelig, a former director at the Federal National Mortgage Association, said on the CAQ webinar, “the annual evaluation of the external auditor is a cornerstone of good corporate governance.” It is a process that experienced audit committees take seriously, understanding that the auditor’s independence and performance are critical elements of investor confidence and capital market strength.

Watch the <a href="https://www.thecaq.org/event-external-auditor-assessment">full replay</a> of the webinar for more on how to effectively assess your external auditor. Access the CAQ's External Auditor Assessment Tool <a href="https://www.thecaq.org/external-auditor-assessment-tool-a-tool-for-audit-committees">here</a>.

<hr />

<em>This article first appeared in </em><a href="https://www.nacdonline.org/all-governance/governance-resources/directorship-magazine/online-exclusives/2025/q1-2025/the-evolving-role-of-audit-committees-in-2025-and-beyond/"><em>NACD’s </em>Directorship® </a><em>Online.</em>

Fostering Constructive Dialogue with the External Auditor

CAQ Staff and Ideagen Audit Analytics Staff

Public companies have been operating in a state of transformation driven by the explosion of artificial intelligence, changing macroeconomic conditions, and evolving regulatory priorities. In response, oversight responsibilities of the audit committee are evolving to include emerging risk areas, in...

Public companies have been operating in a state of transformation driven by the explosion of artificial intelligence, changing macroeconomic conditions, and evolving regulatory priorities. In response, oversight responsibilities of the audit committee are evolving to include emerging risk areas, in addition to oversight of financial reporting and the external auditor.

Now in its 12th year, the <a href="https://www.thecaq.org/audit-committee-transparency-barometer">2025 Audit Committee Transparency Barometer</a>, produced in collaboration with Ideagen Audit Analytics, provides a comprehensive look at how audit committees of S&amp;P 1500 companies are communicating their oversight responsibilities to investors. By analyzing these disclosure trends and layering sentiments from audit committee members themselves captured in the <a href="https://www.thecaq.org/audit-committee-practices-report"><em>Audit Committee Practices Report</em></a>, a distinct theme emerges: while audit committees play an essential role in overseeing key areas, their proxy disclosures are largely stagnating. This “transparency gap” presents an opportunity for audit committees to better tell their story.

[custom_quote text="Oversight responsibilities of the audit committee are evolving to include emerging risk areas, in addition to oversight of financial reporting and the external auditor."]
<h3><strong>Oversight of the External Auditor: The Need for Tailored Disclosures</strong></h3>
Investors want to understand how the audit committee oversees the external auditor including audit firm selection, compensation, evaluation and supervision, and engagement partner selection. However, tailored disclosures in this area have plateaued.

The following data from the Barometer highlights this stagnation in a few key areas:
<ul>
 	<li>50% of S&amp;P 500 companies discuss considerations for appointing the external auditor, a figure that remains unchanged from 2024.</li>
 	<li>Disclosure of audit committee involvement in selecting the external audit partner remained stagnant year-over-year at 53%.</li>
</ul>
Tailored disclosure is always important, but during disruption and rapid change, committees should be especially transparent.

<em>“The persistence of standard language may stem from a combination of legal conservatism and resource constraints. However, by defaulting to standard language, audit committees miss the opportunity to highlight the robust, tailored evaluation processes that committees are conducting behind closed doors.”</em>
<h6 style="text-align: right;">- Marie Pupecki, Ideagen Audit Analytics</h6>
[custom_quote text="Tailored disclosure is always important, but during disruption and rapid change, committees should be especially transparent."]
<h3><strong>Where Disclosure Matches Audit Committee Priorities</strong></h3>
While disclosures regarding core oversight areas have somewhat plateaued, disclosure rates related to audit committee oversight of emerging risk areas remain consistent with audit committee priorities. This is an example of one area where the “transparency gap” is closing.

The <a href="https://www.thecaq.org/audit-committee-practices-report"><em>Audit Committee Practices Report</em></a> singles out cybersecurity as the number one priority for audit committees over the next 12 months. The report also noted that 62% of audit committees had primary oversight of cybersecurity risk.

This priority is reflected in disclosures. In the report, 64% of S&amp;P 500 companies explicitly state that the audit committee is responsible for cybersecurity oversight. Disclosing whether it is the audit committee’s responsibility to oversee cybersecurity provides investors with further transparency into how the company approaches governance of this risk area.

[custom_quote text="64% of S&amp;P 500 companies explicitly state that the audit committee is responsible for cybersecurity oversight."]
<h3><strong>The “Skills Matrix” as a Standard</strong></h3>
A positive trend in governance disclosure is the prevalence of the board skills matrix, which provides insights into both board composition and competency.

90% of S&amp;P 500 companies disclose a skills matrix, up from 85% in 2024 and is responsive to investors’ desire to understand the composition of the board and the expertise that each member brings.

<em>“What makes the skills matrix particularly effective is that it transforms abstract claims about board expertise into concrete, comparable data points. The template is now established for future competency categories, and AI governance is the obvious next addition. As companies face increasing investor questions about AI strategy, risk management, and ethical deployment, boards will need to explicitly demonstrate who brings AI-relevant expertise to these critical oversight discussions.”</em>
<h6 style="text-align: right;">- Marie Pupecki</h6>
[custom_quote text="90% of S&amp;P 500 companies disclose a skills matrix."]
<h3><strong>Looking Ahead</strong></h3>
Here at the CAQ, we know that transparency builds <a href="https://www.thecaq.org/AuditEffect">trust in capital markets</a>. As audit committees navigate 2026 and beyond, the proxy statement remains an excellent opportunity to tell their story.

<em>“The most effective audit committees treat disclosure as a strategic communication opportunity, not a compliance burden. Data-driven benchmarking allows boards to move beyond guesswork and understand where they stand relative to peers on critical transparency measures. Whether it’s auditor oversight, risk management, or emerging issues like <a href="https://www.thecaq.org/rota-ai">AI governance</a>, committees that use benchmarking data can make informed decisions about where to enhance their disclosure and ensure they’re telling their governance story as effectively as they’re doing the work.”</em>
<h6 style="text-align: right;">- Marie Pupecki</h6>
Explore more data from the <a href="https://www.thecaq.org/audit-committee-transparency-barometer">Audit Committee Transparency Barometer</a> and dive deeper into what the data reveals about today’s evolving governance landscape. For additional support for audit committee members, check out our <a href="https://www.thecaq.org/audit-committee-resource-center">Audit Committee Resource Center</a> for the latest updates.

Closing the Transparency Gap: Aligning Audit Committee Actions with Disclosures

This webinar is for audit committee members and those who work with and support audit committees in their financial reporting oversight role continues our journey in exploring the evolution of AI in financial reporting and the audit.

 	How is AI...

This webinar is for audit committee members and those who work with and support audit committees in their financial reporting oversight role continues our journey in exploring the evolution of AI in financial reporting and the audit.
<ul>
 	<li>How is AI being used in financial reporting?</li>
 	<li>How is the use of AI in financial reporting impacting the audit?</li>
 	<li>How are auditors using AI in the audit?</li>
 	<li>How is the use of AI in financial reporting and the audit impacting audit committee oversight?</li>
</ul>
What questions do you have? Ask our panel of experts your questions in real time.

AI in Financial Reporting and Audit – What Audit Committees Need to Know

Webinar

Event

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

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

Anti-Fraud

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

The Center for Audit Quality (CAQ) congratulates the newly appointed and returning members to the Public Company Accounting Oversight Board. We look forward to working collaboratively with the PCAOB as they carry out their work. The CAQ remains committed to...

The Center for Audit Quality (CAQ) congratulates the newly appointed and returning members to the Public Company Accounting Oversight Board. We look forward to working collaboratively with the PCAOB as they carry out their work. The CAQ remains committed to engaging constructively with the PCAOB to support a robust audit environment that serves investors, public companies, and the capital markets.

+++

About the Center for Audit Quality

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.

Statement on Incoming PCAOB Chair

Policymakers

Statements

SEC Regulations

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

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

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="wp-image-17248 aligncenter" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_Emails_Headers_PPTA_V5.png" alt="" width="650" height="163" />

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-17254" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_PPTA_Section-Header_SEC.png" alt="" width="127" height="50" />
<h3><strong>Testimony Before the U.S House Financial Services Committee and the U.S. Senate Committee on Banking, Housing, and Urban Affairs</strong></h3>
The SEC <a href="https://www.sec.gov/newsroom/speeches-statements/atkins-testimony-hfsc-021126">posted</a> Chairman Paul S. Atkins' testimony before the U.S. House Financial Services Committee, the same testimony he shared before the U.S. Senate Committee on Banking, Housing, and Urban Affairs to discuss the work of the SEC.
<h3><strong>Updates to Questions and Answers for Compliance and Disclosure Interpretations (C&amp;DIs)</strong></h3>
The SEC <a href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations">updated</a> the C&amp;DIs around the following topics:
<ul>
 	<li><a href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/securities-act-rules">Securities Act Rules</a> - Questions and Answers of General Applicability</li>
 	<li><a href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/regulation-crowdfunding">Securities Act Rules</a> - Regulation Crowdfunding</li>
 	<li><a href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/securities-act-forms">Securities Act Forms</a> - Questions and Answers of General Applicability</li>
 	<li><a href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/going-private-transactions-exchange-act-rule-13e-3-schedule-13e-3">Going Private Transactions, Exchange Act Rule 13e-3 and Schedule 13E-3</a></li>
 	<li><a href="https://www.sec.gov/rules-regulations/staff-guidance/compliance-disclosure-interpretations/tender-offer-rules-schedules">Tender Offer Rules and Schedules</a></li>
</ul>
<h3><img class="alignnone wp-image-17253" style="font-size: 16px;" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_PPTA_Section-Header_PCAOB-300x86.png" alt="" width="174" height="50" /></h3>
<h3><strong>New PCAOB Publication Provides Auditors With Insights Related to Testing Transactions Between Broker-Dealers and Related Parties</strong></h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/new-pcaob-publication-provides-auditors-with-insights-related-to-testing-transactions-between-broker-dealers-and-related-parties">released</a> a staff publication, "Broker-Dealer Audit Focus: Related Party Transactions." This edition of Broker-Dealer Audit Focus highlights key reminders for auditors of broker-dealers from PCAOB standards related to audit procedures involving a broker-dealer's revenue and expense transactions with related parties. It also provides the staff's perspective on common deficiencies observed in broker-dealer inspections and shares good practices that the staff has observed.
<h3><strong>PCAOB Chairman Logothetis and Board Members Calabria and Laughton Sworn In on February 10</strong></h3>
The PCAOB <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-chairman-logothetis-board-members-calabria-and-laughton-sworn-in-today">announced</a> that Demetrios (Jim) Logothetis was sworn in on February 10, 2026, as Chairman. Dr. Mark A. Calabria and Steven D. Laughton were also sworn in as Board Members. Chairman Logothetis’ current term expires on October 24, 2030, Board Member Calabria’s current term will expire on October 24, 2027, and Board Member Laughton's current term will expire on October 24, 2026. George R. Botic will continue his service as a Board Member and his current term will expire on October 24, 2028. Kyle Hauptman has not yet been sworn in.

<img class="alignnone wp-image-17249" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_PPTA_Section-Header_AICPA-300x93.png" alt="" width="161" height="50" />
<h3><strong>AICPA Seeks Comment on Proposed Changes to Attestation Standards</strong></h3>
The Auditing Standards Board, a standard-setting body of the AICPA, <a href="https://www.aicpa-cima.com/news/article/aicpa-to-seek-comment-on-proposed-changes-to-attestation-standards">voted</a> to seek public comment on proposed updates to attestation standards, in part to address sustainability information and other emerging areas of assurance. An exposure draft of the proposed changes is available <a href="https://www.aicpa-cima.com/resources/download/proposed-ssae-attestation-sustainability">here</a>, with a comment period ending on June 30, 2026. The exposure draft consists of two main parts:
<ul>
 	<li>Updates to the baseline attestation standards to address evolving practice; and</li>
 	<li>Two new AT-C sections related to engagements to report on sustainability information.</li>
</ul>
<h3><strong>Global Survey Reveals Growing AI Adoption Gap As Organizations Struggle With Talent, Technology, and Governance Readiness</strong></h3>
The AICPA and the Chartered Institute of Management Accountants, in partnership with North Carolina State University's Enterprise Risk Management Initiative, <a href="https://www.aicpa-cima.com/news/article/global-survey-reveals-growing-ai-adoption-gap-as-organizations-struggle-with">released</a> a global study examining how executives perceive the opportunities and risks of artificial intelligence across regions, industries, and organizational sizes.

<img class="alignnone wp-image-17252" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_PPTA_Section-Header_International-300x57.png" alt="" width="262" height="50" />
<h3><strong>International Auditing and Assurance Standards Board (IAASB) Publishes Global Roundtable Feedback on Technology and Quality Management</strong></h3>
The IAASB <a href="https://www.iaasb.org/news-events/2026-02/iaasb-publishes-global-roundtable-feedback-technology-and-quality-management">published</a> a summary of feedback from its global Technology Quality Management roundtables, which explored how emerging technologies — including artificial intelligence — are affecting audit and assurance engagements and the application of the IAASB's quality management standards. Participants broadly agreed that the IAASB's quality management standards, particularly International Standard on Quality Management (ISQM) 1 and International Standard on Auditing (ISA) 220 (Revised), provide a strong foundation for managing technology-related risks. The IAASB will use the roundtable feedback, along with other stakeholder feedback, to inform its future work on Technology Quality Management.
<h3><strong>IAASB Launches Survey for Post-Implementation Review of International Standard on Auditing (ISA) 540 (Revised) on Accounting Estimates</strong></h3>
The IAASB <a href="https://www.iaasb.org/news-events/2026-02/iaasb-launches-survey-post-implementation-review-isa-540-revised-accounting-estimates">launched</a> a public consultation survey as part of its post-implementation review of ISA 540 (Revised), <em>Auditing Accounting Estimates and Related Disclosures</em>. The survey focuses on three principal areas:
<ul>
 	<li>Overall views on ISA 540 (Revised);</li>
 	<li>Perceived benefits resulting from implementation of the revised standard; and</li>
 	<li>Potential issues, challenges, or impacts experienced or observed relating to ISA 540 (Revised).</li>
</ul>
The survey is open until June 15, 2026.
<h3><strong>International Accounting Standards Board (IASB) Podcast on the January 2026 Meeting Highlights</strong></h3>
The IFRS Foundation <a href="https://www.ifrs.org/news-and-events/news/2026/02/january-2026-iasb-podcast/">announced</a> that the IASB podcast on the January 2026 IASB meeting is now available. Highlights covered in this episode include:
<ul>
 	<li>Intangible Assets;</li>
 	<li>Post-implementation Review of IFRS 16 <em>Leases</em>; and</li>
 	<li>2026 milestones.</li>
</ul>
<h3><strong>February 2026 IASB Agenda, Meeting Papers, and Summary Now Available</strong></h3>
The IFRS Foundation <a href="https://www.ifrs.org/news-and-events/calendar/2026/february/international-accounting-standards-board/">announced</a> that the agenda, papers, and meeting summary of the February 2026 IASB meeting are now available.
<h3><strong>IASB Consults on Clarifying the Fair Value Option in IAS 28</strong></h3>
The  IASB has <a href="https://www.ifrs.org/news-and-events/news/2026/02/iasb-consults-fair-value-option-ias-28/">published</a> a consultation proposing targeted amendments to clarify which investments a company is eligible to measure using the fair value option in IAS 28 <em>Investments in Associates and Joint Ventures</em>. The IASB's proposed narrow-scope amendments aim to improve consistency in application and provide timely clarity ahead of the effective date of IFRS 18 <em>Presentation and Disclosure in Financial Statements</em>. The IASB has set a shorter comment period to allow for any amendments to be completed in time for the implementation of IFRS 18. The consultation is open until April 20, 2026 and the IASB plans to finalize any amendments by mid-2026, allowing jurisdictions to bring the amendments into national legislation.
<h3><strong>Video Resources: Risk Mitigation Accounting</strong></h3>
The IFRS Foundation <a href="https://www.ifrs.org/projects/work-plan/dynamic-risk-management/video-resources-risk-mitigation-accounting/">announced</a> that new video resources are available on Risk Mitigation Accounting. The videos and technical webcast explain the aims of the proposed Risk Mitigation Accounting model, highlight the potential benefits for companies and investors, and address frequently asked questions on the proposals. The consultation is open for comment until July 31, 2026, and includes fieldwork.
<h3><strong>IFRS Accounting Taxonomy 2025 to Remain Current for 2026 Reporting</strong></h3>
The IFRS Foundation <a href="https://www.ifrs.org/news-and-events/news/2026/02/ifrs-accounting-taxonomy-2025-to-remain-current-for-2026/">published</a> guidance that the IFRS Accounting Taxonomy 2025 remains the current version for the 2026 reporting period. This reflects the fact that there have been no changes to the content or technology of the IFRS Accounting Taxonomy for the 2026 reporting periods. Consequently, stakeholders are advised to continue using the IFRS Accounting Taxonomy 2025 for tagging financial information, in line with local jurisdictional filing requirements.
<h3><strong>International Ethics Standards Board for Accountants (IESBA) Launches Global Surveys to Inform its Role of CFOs Initiative</strong></h3>
The IESBA <a href="https://www.ethicsboard.org/news-events/2026-02/iesba-launches-global-surveys-inform-its-role-cfos-initiative">launched</a> two extended global stakeholder surveys to inform its Role of CFOs initiative, focusing on the evolving role of CFOs and equivalent senior finance leaders, the ethical challenges resulting from this evolution, and whether the IESBA Code remains clear, fit-for-purpose, and practical in the public interest. IESBA is inviting CFOs and other stakeholders who work with or oversee CFO functions to respond to the surveys up until April 24, 2026. The IESBA also <a href="https://www.ethicsboard.org/news-events/2026-02/snapshot-iesba-s-role-cfos-initiative">released</a> a <em>Snapshot</em>, or a short, non-technical overview, on its Role of CFO initiative.
<h3><strong>International Organization of Securities Commissions (IOSCO) Publishes 2026 Workplan</strong></h3>
The IOSCO <a href="https://www.iosco.org/news/pdf/IOSCONEWS782.pdf">published</a> it's 2026 Work Program. Building on its 2025 Work Program, IOSCO will keep its focus on strengthening capital markets. IOSCO's key strategic priorities for 2026 are:
<ul>
 	<li>Strengthening financial resilience and market effectiveness;</li>
 	<li>Protecting investors;</li>
 	<li>The evolution of public and private markets;</li>
 	<li>Technological transformation; and</li>
 	<li>Promoting regulatory cooperation and effectiveness.</li>
</ul>
<img class="alignnone wp-image-17250" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_PPTA_Section-Header_CAQ.png" alt="" width="136" height="50" />
<h3><strong>2026 Audit Profession Outlook: A Post-Disruption Era: Trust, Transparency, and the Audit Profession</strong></h3>
The CAQ <a href="https://www.thecaq.org/aia-2026-profession-outlook">posted</a> an article written by Julie Bell Lindsay, Chief Executive Officer of the CAQ, about the current state of the public company audit profession and advancing the profession in 2026. Lindsay discusses:
<ul>
 	<li>The Audit Effect: An Enduring Foundation in Uncertain Times;</li>
 	<li>The Regulatory Landscape: Collaborating for Stronger Outcomes;</li>
 	<li>Emerging Technologies: From Invention to Integration;</li>
 	<li>The Talent Pipeline; and</li>
 	<li>What This Means in Practice.</li>
</ul>
<h3><strong>Accounting+ Annual Report</strong></h3>
The CAQ <a href="https://www.thecaq.org/accounting-plus-annual-report">announced</a> that the Accounting+ 2025 Annual Report highlights continued growth in awareness and interest, showcases expanded strategic partnerships, and outlines how Accounting+ is evolving to meet the changing economic and workforce landscape. Download the 2025 Annual Report to explore the impact, insights, and path forward.
<h3><strong>AI in Financial Reporting and Audit: What Audit Committees Need to Know</strong></h3>
The CAQ will <a href="https://www.thecaq.org/event-ai-in-financial-reporting-and-audit">hold</a> a virtual event, AI in Financial Reporting and Audit – What Audit Committees Need to Know, on March 26, 2026. This webinar is for audit committee members and those who work with and support audit committees in their financial reporting oversight role, and continues the CAQ's journey in exploring the evolution of AI in financial reporting and the audit. Participants include Vanessa Teitelbaum, CPA, Senior Director, Professional Practice, at the CAQ; Tom Petro, Board director and author, "AI in the Boardroom;" and Mike Leonardson, Partner, at EY. Audit committee members  will have the opportunity to ask the panel of experts questions in real time.

&nbsp;

<hr />

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. 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 | February 2026

Newsletter

PPTA

As part of the CAQ’s efforts to engage a broader array of stakeholders of company prepared information and serve as a prominent voice for the audit profession, KRC Research conducted a survey among institutional investors in the U.S.

The survey research...

As part of the CAQ’s efforts to engage a broader array of stakeholders of company prepared information and serve as a prominent voice for the audit profession, KRC Research conducted a survey among institutional investors in the U.S.

The survey research was conducted online from November 5-24,2025 among 300 Institutional Investors in the U.S. In order to qualify for the study, respondents were screened to ensure:
<ul>
 	<li>Employed as a professional investor with more than five years of experience</li>
 	<li>At companies with a minimum of $500M in assets undermanagement</li>
 	<li>Have appropriate job titles in investment banking, commercial banking, insurance, or other management firms</li>
 	<li>Serve at the Director level or higher</li>
 	<li>Closely follow information about the audit process and regulations related to public company financial statements</li>
</ul>
This report explores how investors view the role of the audit amidst evolving expectations for assurance, innovation, and oversight. It provides further insights into investor priorities and perspectives as the audit profession navigates change, exploring the key themes shaping confidence and trust in today’s capital markets.

<a class="button" href="https://thecaq.wpenginepowered.com/wp-content/uploads/2026/03/caq_annual-institutional-investor-survey_2026-03.pdf">Read now</a>


Annual Institutional Investor Survey

Publications

Welcome back, Audit Insiders, to the first edition of 2026!

This year is already proving to be a transformative one; between a major leadership change at the PCAOB and a back-to-basics agenda from the SEC, there is much regulatory change to...

<img class="wp-image-17321 aligncenter" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_Emails_Headers_Audit-Insider_V1.png" alt="" width="800" height="200" />

Welcome back, Audit Insiders, to the first edition of 2026!

This year is already proving to be a transformative one; between a major leadership change at the PCAOB and a back-to-basics agenda from the SEC, there is much regulatory change to stay up to date on. In this edition, we explore these developments and provide links to some of our latest resources to help you stay ahead of emerging trends in fraud, digital assets, and the overall outlook for our 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="wp-image-17322 aligncenter" src="https://www.thecaq.org/wp-content/uploads/2026/02/2026_Emails_Headers_Audit-Insider_Whats-New_V1.png" alt="" width="800" height="133" />
<h2>SEC Updates</h2>
On January 13, SEC <a href="https://www.sec.gov/newsroom/speeches-statements/atkins-statement-reforming-regulation-s-k-011326">Chairman Paul Atkins</a> directed the Division of Corporation Finance to conduct a comprehensive review of Regulation S-K, the central repository for non-financial statement disclosure requirements. Chairman Atkins' goal is to return to a principles-based approach, focusing on disclosures a "reasonable investor" considers important while avoiding an "avalanche of immaterial information" disclosure requirements.

At the 53rd Annual Securities Regulation Institute, <a href="https://www.sec.gov/newsroom/speeches-statements/uyeda-remarks-securities-regulation-institute-012626">Commissioner Mark Uyeda</a> voiced strong support for the Reg S-K review, suggesting specific reforms to reduce the burden on smaller companies. He proposed adjusting the $120,000 de minimis threshold for related-party transactions under Item 404, which has not been updated in nearly two decades, and suggested revisiting the definitions for Emerging Growth Companies (EGCs) and Smaller Reporting Companies (SRCs) to ensure they remain relevant in the current economic environment.

The Commission is specifically looking for <a href="https://www.sec.gov/comments/cll-15/regulation-s-k#no-back">input</a> on whether certain disclosures have become redundant or obsolete, and the public is encouraged to submit views by April 13, 2026. On February 13, 2026, James Maloney, Director, Division of Corporation Finance also <a href="https://www.sec.gov/newsroom/speeches-statements/moloney-statement-coming-attractions-021326-coming-attractions-division-corporation-finance">asked for commenters to send in any feedback they have on Regulation S-X</a>.
<h3><strong>SEC Approves 2026 PCAOB Budget with Significant Cuts</strong></h3>
On January 22, <a href="https://www.capitolaccountdc.com/p/pcaob-revamp-begins-to-take-shape?utm_campaign=email-post&amp;r=5wu2wg&amp;utm_source=substack&amp;utm_medium=email">the SEC officially approved</a> a $362.1 million budget for the PCAOB, representing a 9.4% decrease from the 2025 fiscal year. Chairman Atkins noted that this "leaner" budget is intended to demonstrate that fiscal discipline and regulatory effectiveness are not mutually exclusive. Notably, the budget includes a 52% reduction in the chairperson’s compensation and a 42% reduction for other board members.
<h3><strong>The SEC Releases Joint Statement on Tokenized Securities</strong></h3>
On January 28, the SEC’s Divisions of Corporation Finance, Investment Management, and Trading and Markets <a href="https://www.sec.gov/newsroom/speeches-statements/corp-fin-statement-tokenized-securities-012826-statement-tokenized-securities">issued a joint statement</a> to provide much-needed clarity on the application of federal securities laws to tokenized securities. The guidance establishes a clear taxonomy: Category 1 involves securities tokenized by the issuer or its agents, while Category 2 involves securities tokenized by unaffiliated third parties without the issuer's involvement. This distinction is critical for auditors and issuers alike as they navigate the registration and reporting requirements for on-chain assets.
<h2>PCAOB Updates</h2>
<h3><strong>CAQ Welcomes New PCAOB Board Leadership</strong></h3>
Following the <a href="https://www.sec.gov/newsroom/press-releases/2026-16-sec-appoints-new-chairman-board-members-pcaob">appointment of new leadership</a> at the PCAOB, the <a href="https://www.thecaq.org/news/statement-on-incoming-pcaob-chair?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider%20Jan%20Feb%202026">CAQ issued a statement</a> congratulating the incoming Chair and Board Members. In our letter, we emphasized our continued commitment to engaging constructively with the Board to support a robust audit environment that serves the interests of the capital markets, while fostering innovation and audit quality within the profession. We look forward to working with the Board as they set out a strategic plan that aligns with the PCAOB’s statutory role and underpins their important oversight role.
<h3><strong>PCAOB Announces 2026 Advisory Group Appointees</strong></h3>
The PCAOB has announced its <a href="https://pcaobus.org/news-events/news-releases/news-release-detail/pcaob-announces-advisory-group-members-2026">new appointments</a> to the Investor Advisory Group (IAG) and the Standards and Emerging Issues Advisory Group (SEIAG). These members, who represent a diverse cross-section of the investment and audit communities, will provide vital input on the Board’s standard-setting agenda and emerging issues—such as the use of AI in audits.
<h2>Deterring and Detecting Fraud</h2>
<h3><strong>SEC Charges ADM and Three Former Executives with Accounting and Disclosure Fraud</strong></h3>
On January 27, the SEC filed settled charges against Archer-Daniels-Midland Company (ADM) and its former executives, Vince Macciocchi and Ray Young, and a litigated action against its former executive Vikram Luthar, for materially inflating the performance of a key ADM business segment, Nutrition, which ADM touted to investors as an important driver of the company’s overall growth. As a part of the settlement, ADM agreed to pay a $40 million civil penalty. This case demonstrates that the Commission is likely to continue to focus on traditional accounting and disclosure fraud, particularly where internal performance management and segment reporting materially affect information reported to investors.

The SEC’s order in this matter underscores the high value they place on proactive cooperation, crediting ADM’s internal investigation, voluntary self-reporting, and remedial enhancements in its decision to accept a settled resolution and shape the sanctions. This further reinforces the Enforcement Division’s longstanding policy that meaningful cooperation can influence both the decision to bring charges and the severity of penalties.
<h2>Anti-Fraud Collaboration Update</h2>
Fraud deterrence and detection take a proactive effort from all the stakeholders in the financial reporting ecosystem, and that is exactly why the Anti-Fraud Collaboration exists. See below for some key resources from the AFC.
<h3><strong>Fraud Forum: Navigating a Dynamic Risk Environment</strong></h3>
The AFC shared key takeaways from its latest <a href="https://antifraudcollaboration.org/fraud-forum-navigating-a-dynamic-fraud-risk-environment/">Fraud Forum</a>, which examined how rapid technological shifts and economic pressures are creating new opportunities for misconduct. While fraud risk continues to evolve, long established tools such as sound governance, risk management, and internal controls remain effective in providing strong safeguards against fraud. Audit committees, management, and both internal and external auditors have the foundational skills needed to continue to deter and detect fraud.
<h3><strong>Cultivating a Questioning Mindset in 2026</strong></h3>
In periods of uncertainty and change, the consistent application of professional skepticism remains a cornerstone of audit quality. As fraud risks evolve and financial reporting challenges grow more nuanced, it remains necessary for auditors to maintain a questioning mindset throughout all phases of the audit. <a href="https://antifraudcollaboration.org/rota-fraud-exercising-and-maintaining-professional-skepticism/"><i>The Role of the Auditor: Exercising and Maintaining Professional Skepticism</i></a>, in collaboration with the AFC, explores the importance of cultivating a questioning mindset and attitude.
<h3><strong>The Impact of a Changing Work Environment on Corporate Culture</strong></h3>
In the last few years, remote and hybrid work models have changed the way employees interact. <a href="https://antifraudcollaboration.org/the-impact-of-a-changing-work-environment-on-corporate-culture/"><i>The Impact of a Changing Work Environment on Corporate Culture</i></a> examines how a "decoupled" workforce impacts corporate culture and offers practical strategies for leadership to reinforce integrity, accountability, and the "speak-up" culture that is vital for fraud prevention.

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<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>New Resource: Navigating the Technical Complexities Digital Assets </strong></h3>
The digital asset ecosystem is developing rapidly, and we are increasingly seeing market participants, including public companies, engage with digital assets. In this quickly evolving ecosystem, trust is more important than ever, and auditors have a critical role to play. Our newest resource, <a href="https://www.thecaq.org/rota-digital-assets?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider%20Jan%20Feb%202026"><i>The Role of the Auditor in Digital Assets: Present and Future</i></a>, explores the current state of the digital asset ecosystem and explores how public company auditors are adapting to meet stakeholder needs. Beyond audits of the financial statements and ICFR, auditors are performing attestation engagements that can help enhance trust and provide increased transparency related to specific aspects of a company’s digital assets operation.

This is an evolving area, and the CAQ is working with auditors and other stakeholders to explore how audit and attestation services, those that can be provided today and that may be provided in the future, can meet stakeholder needs. The publication also includes a framework for boards, regulators, and policymakers helping to bridge the gap between operational risk and oversight.

<a href="https://www.thecaq.org/rota-digital-assets?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider%20Jan%20Feb%202026">Download the guide here</a>.
<h3><strong>CAQ Releases the 2026 Audit Profession Outlook</strong></h3>
The last few years have brought transformational shifts to the public company audit profession. In <a href="https://www.thecaq.org/aia-2026-profession-outlook?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider%20Jan%20Feb%202026"><i>A Post-Disruption Era: Trust, Transparency, and the Audit Profession</i></a>, our CEO, Julie Bell Lindsay, explores where the profession will go next and provides a roadmap for the year ahead.

Read on for <a href="https://www.thecaq.org/aia-2026-profession-outlook?utm_source=newsletter&amp;utm_medium=email&amp;utm_campaign=Audit%20Insider%20Jan%20Feb%202026">additional insights</a>.​​​

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<div>In 2026, the public company audit profession finds itself at a pivotal intersection of tradition and transformation. The profession’s core mandate of enhancing trust remains constant, yet the technology and strategies driving audit quality are evolving at a rapid pace.</div>
<div>

For this edition, we sat down with Natalie Deak Jaros, Americas Deputy Vice Chair – Assurance at EY, and Dipti Gulati, Audit &amp; Assurance Chief Executive Officer at Deloitte, to discuss how their firms are navigating this landscape. From billion-dollar investments in talent to the integration of AI, they share insights on how the profession is strengthening the backbone of the capital markets.

<strong><i>Q: 2025 was defined by rapid technological change and shifting market dynamics. How has your organization adapted its approach to ensure sustainable audit quality during this period?</i></strong>

A: Through our audit transformation in 2025, we strengthened our teams, methods, and results. Our audit transformation reflects a deliberate, multi-year effort to achieve sustainable audit quality, including our $1 billion investment in talent and technology. – Natalie Deak Jaros

<strong><i>Q: While transformation is critical, the profession is also built on bedrock principles. Amidst these changes in the regulatory and technological landscape, how does Deloitte maintain its focus on the core elements of the audit?</i></strong>

A: Throughout 2025, Deloitte has remained committed to instilling trust and confidence in the capital markets. We are focused on providing high-quality audits rooted in the highest standards of ethics, integrity, independence, qualified teams, and innovative technology underpinned by our system of quality control. – Dipti Gulati

<strong>Q: <i>Now, we’re in 2026, and the pace of innovation shows no signs of slowing down. How is EY planning to build on this year’s momentum, particularly regarding emerging technologies like Artificial Intelligence?</i></strong>

A: In 2026, we will continue to build on the success of our transformation and further integrate AI and advanced data analytics to better address risks and deliver actionable insights for our clients and stakeholders. – Natalie Deak Jaros

<strong><i>Q: The value of these advancements often gets discussed in technical terms, but the ultimate impact is on the investor. How do you view the broader purpose of the assurance you provide, and its role in the economy?</i></strong>

A: We empower investors with greater confidence in the financial information businesses share. Importantly, the assurance provided by our audits extends well beyond financial statements—it supports ongoing investment, protects retirement savings, and fosters the growth and stability of the broader economy. – Dipti Gulati​​​​

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</div>
<h3><strong>CAQ Panels at AAA</strong></h3>
In January, my colleagues Vanessa Teitelbaum, Emily Lucas, and Erin Cromwell attended the American Accounting Association (AAA)’s <a href="https://aaahq.org/Meetings/2026/Auditing-Section-Midyear-Meeting/Program">2026 Auditing Section Midyear Meeting</a> where they moderated panels on the impact of AI on auditing, the use of AI by junior auditors, and how academic research can inform practice. As emerging technologies continue to change the way we work, engagement and education across stakeholder groups remain vital. We look forward to our continued engagement with academic stakeholders and AAA.
<h3><strong>Upcoming Audit Committee Webinar</strong></h3>
Join my colleague Vanessa Teitelbaum for a conversation on how audit committee members and those who work with and support audit committees use AI in their roles, and how that work has evolved with the increased integration of new technology. <a href="https://us02web.zoom.us/webinar/register/WN_V_ny62sWTW-XtqVawNORuA#/registration">Engage with a panel of experts on March 26 at 1:00 pm</a> and explore how the use of AI continues to impact the financial reporting ecosystem.

<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>

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