The world faced the dotcom bubble burst; high-profile corporate bankruptcies; and fraud and accounting scandals at Enron and WorldCom. These events shook financial markets and investor confidence in them, dropping the NASDAQ Composite Index 78 percent in a few months.
About Us
Serving investors, public company auditors, and the US markets.
The Center for Audit Quality is the recognized leader - inside and outside of the profession - on all things public company auditing: resource provider, thought leader, and convener.
Our Mission
The CAQ champions the public interest in the capital markets by:
- Elevating the quality, credibility, and transparency of public company audits;
- Advancing critical issues affecting public company audits;
- Driving innovation in assurance; and
- Providing a collaborative forum for capital market stakeholders to address evolving needs and challenges.
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.
Our Values
Integrity
Integrity is a driving force at the CAQ to build a fair, honest, and genuine working environment, which reflects our mission to promote integrity in the corporate reporting ecosystem.
Excellence
Excellence is the results-driven production of high-quality work with strategic and intentional purpose to achieve our mission and organizational goals.
Culture
At the CAQ we understand the power that comes from bringing a variety of voices and backgrounds to the conversation. In our work, we advocate for the advancement of people from all backgrounds.
Teamwork
Teamwork is recognizing and leveraging the CAQ’s employees, our stakeholders, and the profession’s skills and perspectives in a constructive way to advance our mission and achieve common goals.
Transparency
Transparency is communication and actions that help ensure an environment of healthy and efficient knowledge-sharing with our colleagues, our stakeholders, and across the profession.
“The CAQ has established itself as a force in public company auditing, thanks to its convening power, its constructive policy engagement, and vision for the profession’s future.”
- Julie Bell Lindsay, CEO, CAQ
SOX: Enhancing Audit Quality
Financial reporting and audit quality are strong due in part to the current regulatory structure established by the landmark Sarbanes-Oxley Act of 2002 (SOX), which protects investors in the capital markets, while allowing competition and innovation in the US audit market.
The policy response to these financial reporting scandals was intense, which drove the reform of corporate governance standards and the passage of SOX. SOX was designed to restore investor confidence in the capital markets by enhancing accountability and controls. Greater transparency in financial reporting and increased accountability were the underlying principles of the law, which include the following:
Establishment of a new independent regulator—the Public Company Accounting Oversight Board—with authority over audit firms to:
- set standards for audits of public companies;
- enhance auditor ethics and independence (in tandem with the SEC);
- set standards for an audit firm’s system of quality control;
- inspect firms’ system of quality controls and audit engagements; and + enforce laws, regulations, and standards.
Stronger audit committees and corporate governance by requiring
- audit committees, independent of management, for all listed companies;
- audit committees, rather than management, to be directly responsible for the appointment, compensation, and oversight of the external auditor; and
- disclosure of whether at least one “financial expert” is on the audit committee.
Greater transparency, executive accountability, and investor protection by requiring
- audit firms to report certain information about their operations, including names of public company audit clients, fees, and quality control procedures;
- public company CEOs and CFOs to certify financial reports; and
- public company management to assess the effectiveness of internal controls over financial reporting (Section 404[a[) and auditors to attest to management’s assessments (Section 404[b]).
Enhanced auditor independence with new rules that prohibit audit firms from providing
- specified non-audit services to audited companies; and
- any other non-audit service to audit clients that may impair the firm’s independence in fact or appearance.
Building on the foundation laid by SOX, the financial reporting ecosystem is strong and effective. There is strong independent oversight of the auditing profession by regulators and audit committees. The auditing profession is focused on continuous improvement to audit quality that benefits investors in the US capital markets. The audit profession has quickly adapted to meet the needs of this moment, contributing to the sustained, orderly operation of our capital markets—an essential component of our national response to, and recovery from, catastrophic events such as the 2007 financial crisis and COVID-19.
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