Center for Audit Quality: the First Decade

The Center for Audit Quality celebrated its 10th anniversary with a conference that included assessment of its progress since it was created in response to the Enron-era series of accounting failures and some thoughts about upcoming developments. Unabashedly committed to the notion that accounting is “a force for good,” director Cindy Fornelli emphasized the profession’s commitment to “independence, objectivity, and skepticism.” Many of the participants pointed to more attention to cybersecurity and sustainability (including non-GAAP reporting) and coordination with international standards as increasing challenges, necessary for corporate managers, directors, investors, and other stakeholders. In general, the speakers endorsed the Sarbanes-Oxley legislation, though former SEC Chair Harvey Pitt would have preferred the additional flexibility of making it a part of the 34 Act. Some expressed concern about overloading the board, especially the audit committee, and the consensus was that with issues like cybersecurity, the committee should be responsible for ensuring a system is in place, not for performing the checks itself. Some of the participants expressed concern that the new administration’s more insular, protectionist approach might lead to withdrawal from essential international coordination efforts, leaving a gap in leadership. Pitt said, “If we do not participate, it will diminish our impact…and our ability to compete in a global marketplace.”

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