A brand new group of audit regulators is looking for some direction as it takes the helm and establishes a new strategic plan.
The Public Company Accounting Oversight Board has launched a survey to get input on what to cover in its five-year strategic plan. “Following the recent appointment of five new board members, the PCAOB is taking a fresh look at the organization and its future direction in fulfilling its mission,” the board said Tuesday in a news release.
The board has enlisted the help of a government leadership group to conduct the survey and develop the strategic plan. The survey seeks to gather views from investors, auditors, preparers, audit committee members, and academics alike.
Lauding the board’s accomplishments, Chairman William Duhnke said in a statement the appointment of five new members to the five-member board makes it the right time to review progress and determine next steps. "We have a responsibility to make sure we are fulfilling our mandate and providing careful stewardship of our resources,” he said. “We look forward to receiving input from all interested parties.”
The 10- to 15-minute survey asks questions like how the board is viewed—as a watchdog, a regulator, a change agent, or a partner—in bringing about improvements in audit quality. How much change are stakeholders looking for at the PCAOB to respond effectively to a changing audit profession and changing capital markets?
The survey looks for input on what might be the most promising opportunities that would improve the PCAOB’s relevance to capital markets. It also asks for opinions on the most critical constraints. Is it the inspection process? Standard-setting and research approaches? Enforcement? Communications? Or is it the board’s approach to emerging technologies, like artificial intelligence, machine learning, or other advanced analytics?
The PCAOB has been a controversial player in capital markets since it was established under Sarbanes-Oxley to regulate the audit of public company financial statements. Until that time, the audit profession was self-governed, primarily under professional standards set by the American Institute of Certified Public Accountants.
Perhaps most notably the board’s earliest actions included developing requirements for the audit of internal control over financial reporting and establishing an inspection process for audit firms, both of which continue to produce tension. The board’s most recent chairman, James Doty, stoked both of those processes with a more rigorous approach to inspections and a more demanding approach to internal control audits.
Doty also drove a controversial examination of whether audit firms should have term limits on public company engagements, and he led a movement to develop more transparency behind who performs audit work, ultimately requiring audit firms to identify lead partners and supporting audit firms on each public company engagement.