Welcome and Introduction
Thank you, Steve, and congratulations on your leadership of the PCAOB Investor Advisory Group (IAG) as you chair its seventh annual meeting. I join you in thanking SEC Chair Mary Jo White and the staff of the SEC for taking time to attend this meeting and supporting the work of this important group.
First, let me express my appreciation to the IAG members for their dedicated service and thoughtful contributions to the Board as we carry out our mission of overseeing the audits of public companies, brokers, and dealers to protect the interests of investors and further the public interest in the preparation of informative, accurate, and independent audit reports.
In its first seven years of operation, the IAG working groups and members have identified or discussed many significant issues related to the state of auditing and the role and impact of the PCAOB's oversight activities.
As you may know, as a result of Steve's efforts and encouragement, the Board created the IAG to obtain input more directly from investors and to "obtain the views and advice of experts who have a demonstrated history of commitment to investor protection."
Accordingly, the Board "look[s] to the IAG to provide high-level advice and insight on [broad policy issues and other] matters the Board and its staff may face in fulfilling its mission to protect investors."
In my remarks at the 2014 IAG meeting, I summarized many questions and substantive suggestions that the IAG has raised to the Board for consideration. Such issue-spotting and analyses are highly valuable to the PCAOB; they can help us to identify, define, and diagnose problems, design potential alternative solutions, and make informed, evidence-based decisions to respond to problems.
Given the breadth and significance of IAG advice and input, I also suggested that the PCAOB should provide a framework for analyzing and responding to them.
Progress on Protecting the Interests of Investors
The PCAOB continues to seek out advice and insights from investors through the IAG and other outreach activities, and I think we have actively listened to the resulting input. And we've made progress on a number of long-standing and some emerging issues.
In the two most recent IAG meetings, the Board has heard from IAG working groups on the topics of: audit firm business models and incentives (2014); how to improve audit quality and the relevancy of the audit (2014); the relationship and role of the auditor with the audit committee (2014); institutional investors' views on the role and use of audits (2015); the auditor's going concern evaluation (2015); and PCAOB publications and inspections activities (2015).
At last year's meeting, the Board heard from individual IAG members on a range of topics that the Board should prioritize, including transparency of its enforcement activities, the financial reporting and disclosure framework and the scope of auditor assurance, the impact of economic changes on audit procedures, use of audit quality indicators, audit firms' business model and incentives, audit committee oversight of the auditor, auditor focus on non-GAAP and other disclosures, and on improving the auditor's reporting model, among others.
I'm pleased that we'll hear from IAG members today on their views on the status of many of these issues, and particularly the status of recommendations made to the U.S. Department of the Treasury in 2008 by its Advisory Committee on the Auditing Profession (ACAP).
Clearly, the Board has many significant policy issues to consider and I think we're taking some form of action on each of these.
Gaining Insights on Emerging Issues
While some of the issues we discuss with the IAG (and other stakeholders) can be highly technical and some structural issues have existed for years – or even decades – other new issues continue to surface. Globalization, demographic changes, economic trends and shifts, environmental challenges, changing investment and governance practices, political uncertainty, and technological evolution are shaping the future of financial reporting and assurance, among other securities market practices, before our eyes.
In the audit space, these factors raise questions about such significant matters as the role of technology and data analytics in the audit, the role and relevance of the audit in relation to matters outside a company's periodic financial statements, the relationship among audit firm scale, market structure and audit quality, and evolution in the way that we've understood the persistent investor-auditor "expectations gap" since the report of the Cohen Commission in 1978.
I'm pleased that the PCAOB is incorporating more formal mechanisms in its standard-setting process to perform annual environmental scans and ongoing monitoring to identify current or emerging issues that could potentially warrant changes to PCAOB standards or guidance. I look forward to future discussions with the IAG on issues identified through this process.
The PCAOB has a challenging mission, and while the Board must prioritize among myriad strategic risks and opportunities, our mission demands that we listen to investors' views and advice on such matters.
I'm grateful that the IAG members have decided to take stock of a number of previous recommendations from the ACAP, and I look forward to the working group's report. I encourage the IAG to continue to focus on the long-standing and emerging policy issues that present risk (or opportunity) to investor protection.
I look forward to the presentations today. And I thank you for your very important work to support the Board and its mission.
 The views I express are my own, and do not necessarily reflect the views of the Board or staff of the PCAOB.
 Charter of the Public Company Accounting Oversight Board Investor Advisory Group, ¶ I, July 31, 2009. See, Acting Chairman Daniel L. Goelzer, Opening Remarks: PCAOB Investor Advisory Group Meeting, May 4, 2010.
 Ibid., ¶ III.
 Board Member Jeanette M. Franzel, The Importance of Views and Advice From the Investor Advisory Group, Oct. 20, 2014.
 The PCAOB seeks input from investors and investor advocates through its Standing Advisory Group, individual Board and staff outreach, and through public consultation on Board activities, such as standard-setting actions.
 U. S. Department of the Treasury, Final Report of the Advisory Committee on the Auditing Profession to the U.S. Department of the Treasury (October 6, 2008), available at: http://www.treas.gov/offices/domestic-finance/acap/docs/final-report.pdf.
 American Institute of Certified Public Accountants, The Commission on Auditors' Responsibilities: Report, Conclusions, and Recommendations (New York: 1978).