Many key people announced they were leaving the Public Company Accounting Oversight Board in May. These included:
NASBA has benefited from the assistance offered by several of these PCAOB leaders and we look forward to working with the PCAOB as it moves forward under the direction of PCAOB Chairman William D. Duhnke, III. He announced in May that the PCAOB expects to complete a draft of its 2019 strategic plan by the end of July, at which time the plan will be open for public review and comment. It is anticipated the plan will be finalized in November, alongside the PCAOB’s final budget for 2019.
Through 2017, the PCAOB had conducted more than 3,500 inspections of PCAOB-registered audit firms. Its inspectors had also looked at significant portions of more than 13,000 public company and broker-dealer audit engagements. Chairman Duhnke observed that the information gathered from those inspections has improved audit quality, but he added: “Notwithstanding these improvements, however, many firms have ‘plateaued’ in their progress toward improved inspection results. Therefore, now is an excellent time for us to consider the potential reasons for those plateaus, including considering the continuing effectiveness of our current inspection approach in driving further improvement in audit quality.”
Chair Duhnke praised SEC Chairman Jay Clayton for bringing him together with his fellow Board members: J. Robert Brown, Duane M. DesParte, Kathleen M. Hamm, and James G. Kaiser. They are “a diverse set of talented and dedicated individuals.” Chair Duhnke stated, “Each of my fellow Board members brings a wealth of relevant experience and skills to the Board.” Prior to their PCAOB appointments: Mr. Duhnke was staff director and general counsel to the U.S. Senate Committee on Rules and Administration; Mr. Brown was a professor of law at the University of Denver; Mr. DesParte was senior vice president and corporate controller of Exelon Corporation; Ms. Hamm was the global leader of securities and Fintech solutions and senior strategic adviser on cyber solutions at Promontory Financial Group; and Mr. Kaiser was a partner and the global assurance methodology and transformation leader at PricewaterhouseCoopers.
Five core values have been preliminarily identified by the PCAOB as required to achieve their mission: integrity, excellence, effectiveness, collaboration and accountability.
“This is an exciting time for the auditing profession, which as everyone here appreciates, sits on the precipice of substantial change,” Chair Duhnke stated. “Innovations in data analytics, and technology unquestionably will disrupt the profession over the coming years. These disruptions will change not only how audits are conducted, but also the business and staffing models of audit firms. As an organization, we must not stand in the way of these coming innovations. We must, instead, foster them and focus our efforts on ensuring that they advance audit quality and thus promote the efficiency of our capital markets.”
Among the questions the PCAOB is asking themselves, Mr. Duhnke mentioned:
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