There Will Be Specialists

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Future auditors will not be able to enter the workforce without knowing basic technologies, but there will still be the need for different cybersecurity specialists to properly perform engagements, predicted panelists at the Baruch College/NASBA Center for the Public Trust 13th Annual Audit Conference on Ensuring Integrity, December 4 in New York City. While the chain of transactions in blockchain is very secure, and hard to modify, one should never underestimate the creativity of those who wish to engage in fraud, Douglas Bloom, PWC Director- Cybersecurity & Privacy and Financial Crimes Unit, cautioned.

Getting an understanding of what an organization is doing, in order to play the role of translator, can help an accountant do his or her job, but that demands keeping up with technical skills, Mr. Bloom said. For an overview, he recommended two books: Blockchain: Ultimate Guide to Understanding Blockchain, Bitcoin, Cryptocurrencies, Smart Contracts and the Future of Money, by Mark Gates and Blockchain Revolution: How the Technology Behind Bitcoin and Other Cryptocurrencies is Changing the World, by Don Tapscott and Alex Tapscott. Chris Halterman, EY Executive Director – Advisory Services, also recommended the Center for Audit Quality’s paper on “The CPA’s Role in Addressing Cybersecurity Risk,” and the AICPA’s website for cybersecurity resources.

The implementation of the PCAOB’s new auditor reporting standard is an area the SEC and PCAOB are both watching carefully and on which they anticipate coordinating efforts, speakers told the conference. The new standard’s included requirement for communication on critical audit matters (CAMs) becomes effective for audits of accelerated filers for fiscal years ending on or after June 30, 2019 and for all other companies for fiscal years ending on or after December 15, 2020; however, there are many “dry runs” being done in advance of those dates, Marc Panucci, SEC Deputy Chief Accountant – Office of the Chief Accountant, reported, and the SEC is interested in the feedback from those efforts. He said in Europe this kind of communication has been welcomed by investors and the question now is if CAMs will meet the expectations of US investors.

NASBA Ethics Committee Chair and Northeast Regional Director Catherine Allen was one of the panelists on the “Ethical Issues” panel that summarized the work being done by the International Ethics Standards Board for Accountants and the AICPA’s Professional Ethics Executive Committee. They explained how as a member of the International Federation of Accountants, the AICPA tries to converge its ethics standards with the IESBA’s. However, in the case of NOCLAR (non-compliance with laws and regulations), the exposed AICPA interpretation would not allow the CPA to go around client confidentiality despite public protection. Brian Lynch, incoming PEEC Chair reported. “We got a lot of comments on this interpretation. We will probably move forward with some interpretation, but we are working with NASBA to see if there is a state-level solution.”

Noel Allen, NASBA outside legal counsel, also addressed the meeting, reminding the practitioners in attendance that only a handful of states have adopted international standards. He cautioned them that there are differences among the states’ standards.