New PCAOB Staff Resource for Audit Committees Aims to Facilitate Dialogue on Risk of Fraud and Other Topics

Washington, DC, Jul. 21, 2023

Released today, a new PCAOB staff Spotlight suggests questions that may be of interest to audit committee members to consider among themselves or in discussions with their independent auditors, particularly given today’s economic and geopolitical landscape. 

Investors and other stakeholders look to audit committees of public companies to oversee the quality and sufficiency of the accounting and financial reporting processes of public companies, as well as the audits of public companies. Effective execution of the audit committee’s responsibilities is especially important, given higher audit deficiency rates that the PCAOB staff has observed recently – and the consequent need for audit firms to sharpen their focus on increasing audit quality. 

As part of their responsibilities, it is important that audit committees engage in effective two-way communication with auditors and ask relevant questions throughout the audit. The Spotlight groups questions that audit committees may want to consider regarding the auditor’s work on the following topics: 

  • Risk of fraud 
  • Risk assessment and internal controls 
  • Auditing and accounting risks 
  • Digital assets 
  • Merger and acquisition activities 
  • Use of the work of other auditors 
  • Talent and its impact on audit quality 
  • Independence 
  • Critical audit matters 
  • Cybersecurity 

Audit committee members and other stakeholders may also want to consider other PCAOB staff publications as reference points for relevant discussions, including the PCAOB staff’s April 2023 Spotlight, “Staff Priorities for 2023 Inspections.”  

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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, including compliance reports filed pursuant to federal securities laws.

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