NASBA at Regulators Conference

State Board Report

January 2017

NASBA was among the half dozen U.S. regulatory and government agencies invited to join the Public Accounting Oversight Board at its 10th Annual International Institute on Audit Regulation with representatives from 36 non-U.S. audit regulators, December 12-14 in Washington, D.C. PCAOB Chairman James R. Doty observed: “The PCAOB’s long-term strategy of collaborating with our international counterparts has delivered significant positive results for the investing public over the past decade.” Chairman Doty led a panel discussion with regulators from Canada, the United Kingdom, South Africa and Switzerland on moving audit regulation forward in the current environment.

The keynote speaker was the U.S. Treasury Department’s top point person on cybersecurity, Deputy Secretary Sarah Bloom Raskin. “These are still the early days in developing assurance processes around cybersecurity,” Ms. Raskin observed. “Key questions include: What is the optimal approach to cybersecurity assurance and what are the expected levels of assurance? What are the respective roles of the institutions themselves – through their own information security, compliance, internal audit, and risk functions – as well as independent third parties like auditors?”

Deputy Raskin described the AICPA’s proposal for a new cybersecurity assurance engagement to the PCAOB conference. She commented: “If done right – with independence, objectivity, appropriate expertise and professional skepticism – such an assurance process would be a vehicle by which greater cybersecurity and resilience could be achieved. Given the importance of getting it right, I urge you as audit regulators to carefully consider and monitor the development of cybersecurity assurance services.”

Speakers also discussed emerging audit technology as well as the PCAOB’s methodology for its inspections and hearings. The countries represented at the meeting divided into groups to compare and contrast what each is doing with what the PCAOB is doing.

In late November the PCAOB announced its cooperative agreement with the Italian audit oversight regulator, Commissione Nazionale per la Società e la Borsa (CONSOB). The PCAOB now has inspection agreements in place with 14 European audit regulators that have firms which have registered with the PCAOB. Negotiations with several other European regulators are underway. The agreements provide for joint inspections and allow for the exchange of confidential information in accordance with each of the countries’ law.