Building Tomorrow’s Audit: Four Strategies for a Tech-Forward Future

Remarks as prepared for delivery

Thank you for that kind introduction. I'm delighted to be here at the 69th World Continuous Auditing & Reporting Symposium. This conference brings together some of the brightest minds in the accounting and auditing profession—academics, practitioners, and technologists—all focused on a question that keeps me up at night: How do we build tomorrow's audit?

First, the views I express today are my own and do not necessarily reflect the views of the Public Company Accounting Oversight Board, other PCAOB Board Members, or PCAOB staff.

Let me start with a fundamental question: What if the audit of tomorrow isn't just better— what if it's fundamentally different? That's not just a hypothetical. That transformation is happening right now, and the decisions we make today will determine whether our profession leads or is left behind.

The TIA Journey

It was one of the greatest privileges of my time at the PCAOB to chair the Technology Innovation Alliance Working Group, or TIA. Here's a remarkable coincidence: on November 30, 2022, the PCAOB officially launched TIA¹—the very same day that OpenAI released ChatGPT to the public². While we didn't plan that timing, it turned out to be prophetic. That single day – November 30, 2022 - marked the beginning of the AI revolution that would reshape how we think about technology in auditing.

From November 2022 through May 2024, our ten-member TIA working group—comprising external professionals specializing in emerging technologies and auditing—collaborated extensively with stakeholders across the audit ecosystem. We engaged with audit firms large and small, preparers, investors, academics, and technologists. Our objective was clear: develop a strategic vision for how the PCAOB and the profession can harness technology to improve audit quality and protect investors.

The TIA delivered its recommendations in May 2024, and they were publicly released by the PCAOB only recently in September 2025.³ But here's the reality: AI has exploded since the TIA finalized its recommendations. We've seen the rapid advancement of agentic AI systems, more sophisticated large language models, and AI capabilities that seemed like science fiction just 18 months ago. If anything, the urgency underlying the TIA’s recommendations has only intensified. Today, I'll share the four strategic priorities that emerged from this work—priorities that I believe will lead us toward a tech-forward future.

The Foundation: Data and Trust

But before I dive into those four strategies, let me be clear about something fundamental: we are in the trust business. Accounting and auditing are the foundation of trust in our capital markets. And in a world where truth is increasingly difficult to discern—where misinformation spreads faster than facts—our role becomes even more critical.

This is why I see a tremendous opportunity for AI assurance. If our profession adapts quickly, we will lead. We can define the standards, shape the frameworks, and help ensure that AI systems used in financial reporting and auditing as well as other domain areas are trustworthy, transparent, and accountable. But if we resist this transformation—if we cling to the status quo—we risk losing this precious opportunity.

Let's embrace innovation. Let's evolve. Let's lead. Because the future of trust depends on it.

Strategy #1: Promoting Structured Data Creation and Dissemination in Public Company Audits

The first strategic priority is to promote the creation and dissemination of structured data. This was TIA's first recommendation because without quality, structured data, none of the other innovations can succeed. Data is the fuel that powers AI, and the quality of that fuel determines the quality of the output.

Let me give you a concrete example of why this matters. Imagine an audit firm that has standardized its audit documentation structure across all engagements. An AI agent could continuously monitor workpapers across hundreds of audits, identifying patterns, flagging inconsistencies, and learning from high-quality work. The use of AI could predict risks of material misstatements. Now imagine that same firm operating today, where every audit uses different structures, different naming conventions, different taxonomies. The AI has no foundation to build on. That's the difference between innovation that scales and innovation that stalls.

AI transformation is well underway—one that will reshape the accounting and auditing profession as we know it. In particular, agentic AI will be changing how we work. Professor Miklos Vasarhelyi recently provided me the opportunity to hear about some of his students’ and researchers’ work. One involved the use of agentic AI in auditing and it gave me a better appreciation of its potential and mechanics. Agentic AI is an AI system that can set goals, reason through multiple steps, and make decisions autonomously. Unlike conventional AI that follows predetermined functions, agentic AI operates with proactive independence—it can plan and execute complex workflows with minimal human oversight. This makes it particularly well-suited for audit workflows.

Now, audits may or may not become cheaper, but I believe they will become more comprehensive, more insightful, and more accessible—especially for smaller firms and investors who stand to benefit most from these advancements.

To create this foundation, we can start with a standardized taxonomy for audit documentation. The concept of the audit documentation taxonomy is not new. In fact, Eric Cohen who is a TIA member and is speaking later today, presented the idea at the WCARS 20 years ago in 2005. With the advancement of AI, we can now appreciate the significant value of his idea. Several advantages arise from standardization: First, superior data improves AI learning capabilities. Second, standardization supports smaller firms by enabling third-party software providers to develop efficient, off-the-shelf solutions. Third, a uniform structure simplifies auditor transitions and potentially lowers initial audit costs.

Looking ahead, AI could even contribute significantly to creating this comprehensive taxonomy. These systems could initially be piloted within an innovation lab, where anonymized audit workpapers from various firms are analyzed to develop standardized structures. Once established, AI agents would benefit from enhanced autonomy, learning from higher-quality data and increasing trust in their outputs.

Now, let me touch on a second component of this first strategy: digital signatures. Currently, audit reports and signatures included in SEC filings are submitted by issuers—not by auditors themselves. This creates a trust and accountability gap. Issuers can make substantive mistakes when copying and pasting audit information, such as adding the wrong auditor name or uploading the wrong audit report. This lowers the quality and trustworthiness of the audit information itself—a particular problem when we're trying to adopt technology that depends on reliable data.

Digital signatures can solve this problem. They provide digital logs that archive when and where a document was signed and by whom. When auditors digitally sign their audit reports, it enhances accountability, traceability, and trust. It also reduces the surface area for cyberattacks, because bad actors can no longer simply alter audit information in filings. Additionally, digital signatures can streamline the audit reporting process, reducing redundant steps between filing an audit report in a Form 10-K and reporting that same information to the PCAOB in a Form AP. This efficiency allows audit firms to shift time and resources from administrative compliance to higher-value audit procedures—which ultimately improve audit quality.

Strategy #2: Using AI in Audit

The second strategic priority is the responsible integration of AI into audit practices. Improving audit quality and protecting investors requires fostering innovation and responsible technology adoption. For too long, the auditing profession has relied on linear, manual, sampling-based methods that have remained largely unchanged for decades.

But let me ask you this: Does continuing to rely solely on decades-old methods best serve investors in 2025? I believe the answer is clear. With the advancement of agentic AI, we now have the tools to move toward continuous auditing and full-population coverage. This shift will dramatically enhance audit quality.

Here's a hypothetical to illustrate the urgency. An audit firm uses an AI tool to test 100% of journal entries, as opposed to taking the traditional manual sampling approach. One scenario is that regulators recognize 100% testing as an improvement because it provides more audit coverage. The second scenario is that the lack of clear standards results in regulators seeking unreasonable levels of detail about the AI model. By requiring the firm to "turn over every rock," the firm decides to return to manual sampling because manual sampling is less risky from a compliance standpoint.

So I ask you: Does going from 100% testing to a sampling approach advance investor protection? I believe the answer is a clear "no." And under this scenario, is the regulator an anchor weighing down innovation or an engine catalyzing it? Again, the answer is clear.

The PCAOB can best advance its investor protection mission by laying the groundwork that catalyzes innovation. We must explicitly support firms in adopting new technologies that improve audit quality—not just by permitting innovation, but by actively encouraging it. Regulations should not merely be check-the-box compliance rules; rather, they should enable progress toward elevating audit quality.

To date, the PCAOB has not issued useful guidance regarding AI. The rapid development of AI highlights an urgent need for regulatory action. TIA recommended forming an AI Task Force to examine use cases using an agile methodology, with the aim of developing a principles-based AI framework. We do not have to start from ground zero—we can build upon established models like ISO 42001 and NIST's AI risk management framework.

In sum, if we truly want to promote audit quality and protect investors, we must embrace technological innovation in auditing. It's a strategic imperative and, more importantly, it's what investors deserve and what the capital markets need.

Strategy #3: Regulatory Innovation Capacity Building

The third strategic priority is to build regulatory innovation capacity to drive ongoing improvements in audit quality. This is an opportunity for the PCAOB to deepen its understanding of AI's use by audit firms through structured experimentation and information sharing.

Specifically, the PCAOB could establish an Innovation Lab to conduct structured experimentation by engaging with audit firms, preparers, technologists, and other stakeholders. A sandbox within the Innovation Lab would provide valuable collaboration and generate insights into developing agile, technology-driven standards through AI experimentation and data-driven insights.

I envision a future where the regulator is at the forefront of developing technology standards that are nimble and remain relevant as technology continues to evolve. The UK's Financial Reporting Council launched their Innovation and Improvement Hub in September 2025 to create an exploratory space for collaborative problem solving.⁴ This is the time to catch up!

I spoke extensively about the Innovation Lab concept at the MindBridge Vision 2025 conference⁵, so I'll only touch lightly on it here. But let me emphasize this: doing nothing is not a viable option. Talk is cheap and time is expensive, and we have already lost too much time.

Strategy #4: Encourage Technology Literacy in Auditor Skillsets

Finally, promoting technology literacy among auditors is critical. The rapid advancement of technology demands increased engagement and learning opportunities for all auditors—seasoned professionals and those new to the profession alike.

For those entering the profession, I continue to encourage institutions of higher education to incorporate advanced data analytics, computer science, and AI into their accounting curricula. Auditor proficiency needs to extend beyond traditional accounting and auditing to include technology and data literacy to elevate auditors’ effectiveness.

Here's a question we must ask ourselves: Are we preparing the next generation of auditors for the profession as it is, or for the profession as it needs to become?

As we look to the future, it's clear that technical expertise alone will not be enough. The next generation must cultivate two essential qualities: courage and problem-solving ability.

Let's start with courage. Accounting is fundamentally built on truth. We are defenders of truth, and truth is the foundation of trust. As I mentioned in the beginning, in today's increasingly complex and information-saturated world, truth is harder to discern. The proliferation of misinformation challenges our ability to stand firm. Sometimes, telling the truth comes at a cost. I believe courage is not optional, it's essential.

This profession should be seen as bold, innovative, and focused on the greater good. Instead of saying auditors merely follow procedures, we should highlight how they build trust in capital markets. To uphold trust, we must be brave enough to speak the truth even when it's difficult—even when it makes us the "contrarian."

Now, let's talk about problem-solving. The challenges ahead will be more complex and multi-faceted than ever before. Our future accountants and auditors must be equipped not just to follow procedures, but to think critically, learn continuously, and work innovatively. We must show them how their work drives problem-solving, and improves lives and our world.

The profession must transition from a perception of strict, compliance-focused auditing to one that appeals to younger generations by providing flexibility and opportunities for problem-solving. AICPA's 2025 Trend report shows a 6.6% decrease in accounting graduates for 2023-2024.⁶ While this is lower than previous declines, it still raises concerns about the profession's future. We need to reshape the profession to attract future talent.

Together, courage and problem-solving form the pillar of a profession that does not merely respond to change—it leads it.

A Personal Reflection

As I reflect on my tenure as a PCAOB Board Member, I am filled with gratitude, resolve, and a deep sense of purpose. When I joined the PCAOB in November 2021, I brought a conviction that truth, transparency, and trust must be the cornerstones of audit regulation.

Over these past four years, I've been described as "data nerd,"⁷ "vocal critic,"⁸ “lone dissenter,”⁸ and "contrarian."⁹ I embrace each label proudly. They reflect my unwavering commitment to evidence-based decision-making, and my belief that our policies must serve the public interest—not just in theory, but in practice.

I've challenged the notion that compliance alone defines excellence. A "check-the-box" mentality does not improve audit quality. I’ve blocked harmful audit regulations by using my votes and voice strategically. I've advocated for reforms that promote innovation, especially in how we integrate technology into auditing. Through TIA and other initiatives, I've worked to elevate the voices of those often unheard—auditors committed to integrity, academics shaping the next generation, and real investors seeking reliability.

Leadership is not about popularity. It's about having the courage to stand firm in one's convictions—because that's what builds trust in the capital markets we serve. As Maya Angelou, the celebrated poet and civil rights activist, said, "Courage is the most important of all the virtues because without courage you can't practice any other virtue consistently."

Conclusion

The strength of our profession doesn't come from regulators alone, or auditors alone, or academics alone. It comes from all of us—working together, undivided. Let us build a profession rooted in truth, driven by quality data, empowered by AI, and guided above all by integrity.

The future of audit isn't inevitable. It's a choice. And we're making that choice right now, in this room, with the decisions and actions we take today. I believe in this profession. I believe in its capacity for courage and innovation. And I believe that together, we can build tomorrow's audit—one that serves investors, strengthens capital markets, and upholds the public trust.

Let's choose to lead.

Thank you.