Walden Siew’s Post

VP Allison M. Henry connected with Mark Maurer, reporter at The Wall Street Journal, to express the PICPA’s concerns about the recent overreaching proposals from the PCAOB, that we know will uproot the audit profession, if passed. Auditors are not attorneys, and while we commend the PCAOB for their initiative to improve audit quality, the current proposals would take us in the wrong direction. Read to full story at: https://lnkd.in/entY6eMx

So glad PICPA could lend a perspective to this WSJ article on PCAOB regulation.

Modernizing Auditing Practices In the wake of recent auditing deficiencies and the ensuing scandals, the Public Company Accounting Oversight Board PCAOB, is considering imposing tighter regulations on auditing firms. Undoubtedly, this is a crucial step towards upholding the integrity of auditing practices and safeguarding the interests of investors. However, as discussions unfold, it's evident that many stakeholders feel the burden of responsibility should not solely rest on the shoulders of auditing firms. Some argue that the proposed regulations could potentially inundate audit firms with tasks that extend beyond their core expertise. In my view, the call for modernization in auditing and enhanced transparency is imperative. The auditing landscape, despite its pivotal role, often lags behind in adapting to evolving complexities. Yet, addressing these challenges requires a collaborative effort. The PCAOB, audit firms, and companies alike must all play active roles in shaping the future of auditing practices. The Wall Street Journal article by Mark Maurer is a good read. #accounting #audit #PCAOB

PCAOB's long awaited proposals to make auditors more responsible for detecting and reporting signs of fraud and rule-breaking at the companies they audit . . . https://lnkd.in/eUyz6sFk Thanks to Mike Cohn at Accounting Today #audit #fraud #riskmanagement

The Public Company Accounting Oversight Board recently voted to bolster the rules around firms’ reporting annually and for special circumstances, such as a filed lawsuit or private-equity investment. This regulatory change is not just a compliance task; it presents an opportunity for firms to reassess their financial strategies and risk management policies. Importantly, all firms need to make public their policies for identifying and managing cybersecurity risks.

Auditors voice concerns over PCAOB's expanded responsibilities proposal Auditors are expressing significant concerns over recent proposals by the Public Company Accounting Oversight Board (PCAOB) that aim to extend their responsibilities into areas like fraud detection and cyber risk management. These proposals are part of a broader effort by PCAOB Chair Erica Williams to modernize auditing standards, which some auditors feel could fundamentally change the profession by imposing additional workload and costs, especially amid challenges in retaining skilled personnel. The PCAOB's initiatives include requiring auditors to proactively identify fraud and other illegal activities, a move that has drawn criticism for potentially necessitating legal expertise beyond the traditional scope of auditors. This proposal, in particular, has led to a split vote among PCAOB members, with concerns about escalating audit fees due to the need for additional specialist consultations. Furthermore, the PCAOB wants audit firms to disclose new metrics about their operations and to submit confidential financial statements, adding to the industry's apprehension about overregulation. While these measures are intended to enhance transparency and investor protection, they are seen by many in the auditing field as overly burdensome. Investor groups, however, support the PCAOB’s push for more stringent regulations, arguing that they would lead to greater transparency and accountability in audits, ensuring that investors get their money's worth. The debate continues as the PCAOB reviews public feedback on these proposals, aiming to refine and possibly adjust its approach based on industry input. 🔗 Subscribe to CFO Slice now and start receiving the insights you need to excel. https://lnkd.in/db6PnmPG #auditors #CFO #finance #PCAOB

This is a massive change in audit firm disclosure. Among other things, these metrics would provide information on who within the audit firm is performing the work (partner involvement) and partner workload. Right now the primary audit firm disclosure's we have are: - Audit fees and non-audit fees paid to a firm's financial statement auditor - City and state from where the audit report is is issued - Tenure of the audit firm with the client (since 2017) - Engagement partner overseeing the audit (since 2017) - Critical audit matters (since 2019), yet most firms are disclosing only 1 or 2

Excellent media coverage for the Chartered Institute of Internal Auditors in this piece on Reuters about our new Internal Audit Code of Practice. The story has also been syndicated across multiple media outlets across the globe. Designed to equip organisations with the tools to navigate today’s increasingly complex risk environment, the new Code sets a higher standard for internal audit practices across the UK and Ireland, bolstering corporate governance and contributing to economic stability. In a time of rapid and unprecedented change, the Code offers Audit Committees and internal audit professionals a comprehensive roadmap and set of principles to ensure the effectiveness of internal audit functions. For the first time, the Code offers a unified approach encompassing the financial services, private and third sectors, elevating the standards of internal audit practices across the board. Spearheaded by an independent committee established by the Chartered IIA and chaired by Sally Clark, Audit Committee Chair at Citigroup Global Markets, the Code has received input from several key UK and Irish regulators, including the Bank of England, Central Bank of Ireland, Financial Conduct Authority, and Financial Reporting Council. The Code’s development was also shaped by extensive public consultation, involving hundreds of internal audit professionals and other stakeholders including business leaders, regulators, standard setters and other professional bodies. Building on the new Global Internal Audit Standards and the revised UK Corporate Governance Code, the updated Internal Audit Code of Practice aligns with these frameworks while introducing several key enhancements aimed at supporting efforts to restore trust in the broader audit and corporate governance eco-system.

Interesting article from the FT, highlighting the challenges for Auditors to identify fraud. The article states that regulators fear auditors are failing in their role as a last line of defence for investors against corporate shenanigans. Audit firms argue that company executives are responsible for the accuracy of financial statements and that the role of an auditor role is only to provide reasonable assurance — not a guarantee — that a financial statement is free from material misstatement. Apparently, in the US, the Public Company Accounting Oversight Board is revamping rules on how auditors must look for and deal with evidence of a client’s non-compliance with laws and regulations (Noclar). The intent is to force auditors to cast a wider net for matters that could have a material effect on a company’s financials, even indirectly, by leading to big fines or regulatory action that threatens the business. Audit firms have responded that they cannot be expected to make legal judgments, and that the huge amount of extra work implied by the Noclar proposal as currently drafted probably will not uncover anything significant that current procedures do not already. A narrower proposal in the UK is apparently being proposed, requiring auditors not to have to probe every minor law or regulation and can use management’s own compliance programmes as a starting point.

📈 📉🤔 SEC charges against audit firm BF Borgers 1,500 SEC filings demonstrates the need for executives and governance to adequately assess internal and external accounting and financial reporting capabilities to maintain risk management and compliance over financial reporting. Centri Business Consulting, LLC provides high quality expertise on-demand to enhance the timeliness and effectiveness of financial reporting and derisk over reliance on internal capabilities and auditors as oversight in an environment with growing accounting and reporting complexities. #financialreporting #audits #riskmanagement #financialstatements #SECreporting #PCAOB #privatecompany #compliance #advisory #accounting #finance #consulting #SEC