A Study by and Recommendations From the Technology Innovation Alliance Working Group Posted to PCAOB Website

A study by and recommendations from the Technology Innovation Alliance (TIA) Working Group have today been posted to the PCAOB website. The TIA Working Group was chaired by Board Member Christina Ho and brought together professionals from outside of the PCAOB with expertise in emerging technologies.

Launched in November 2022, the Board tasked the TIA Working Group with providing two deliverables to the Board: (1) a study on the use of emerging technologies by auditors and preparers relevant to audits and their potential impact on audit quality and (2) recommendations regarding how the Board’s existing or future oversight programs might address the use of emerging technologies by auditors and preparers. The TIA Working Group concluded its work in August 2024.

The TIA Working Group prepared the following two documents that have today been posted to the PCAOB website:

• Current State Deliverable (August 30, 2023): This study offers perspective on the current needs at the time and motivations of investors and others, the broad evolution of auditing, an overview of the current state of technology in auditing and financial reporting, and challenges related to technology adoption for auditors and preparers.
• Transforming Audit Quality Through Technology (May 30, 2024): In addition to providing further context on the use of technology in auditing, this report presents four strategic ideas on ways that the PCAOB can promote the use of technology in auditing, including promoting structured data creation and dissemination in public company audits; focusing on the use of AI in public company audits; regulatory innovation capacity building to facilitate ongoing innovation in audit quality, including by establishing an Innovation Lab; and encouraging technology literacy in auditor skillsets.

The two documents reflect the views of the TIA Working Group and do not necessarily reflect the views of the Board, individual Board Members, or PCAOB staff.

“Innovation in public company auditing is essential because it can serve as an engine that improves audit quality,” said Board Member Ho. “As the Chair of the TIA Working Group, I am grateful to our 10 members and the many stakeholders who generously contributed their time and expertise. Although it has been 15 months since the TIA Working Group presented its recommendations to the PCAOB Board, they remain relevant even with the unprecedented advancement in technology. I hope that these recommendations will spark renewed and urgently needed dialogue on how audit regulations can enable innovation by advancing the responsible use of technology by audit firms in conducting public company audits.”

Beyond its engagement with its advisory and working groups, the PCAOB continues to monitor and study technology-related developments with implications for auditors, investors, and other stakeholders. Visit the Data and Technology project page to learn more.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.