I fully support the Board's updated five-year Strategic Plan and associated Budget.
Independent and consistently high quality financial statement audits are an essential tool in helping ensure reliable and relevant financial reporting for our capital markets. The PCAOB's oversight of public company audits is critical in driving continuous improvement in audit quality.
As a newly formed Board last year, we performed a comprehensive assessment of the audit environment and the opportunities and challenges we face. Our assessment was thoughtful, collaborative and inclusive, incorporating input from across a broad array of stakeholders.
Our oversight activities, stakeholder engagement and transformation initiatives over the past year have reinforced to me that the strategic goals and objectives we established last year continue to be relevant and responsive to fulfilling our mission.
The Plan before us today drives us further down the path upon which we embarked last year to achieve these goals and objectives. I continue to believe in this Plan and the promise it offers.
There are several elements of the Plan that, consistent with last year, I view as particularly important:
- Our consideration of promoting audit quality, from a preventative standpoint, through improvements in firm quality control systems and the sharing of successful audit practices;
- Our focus on improving the relevance and timeliness of information we share about audit quality;
- Our commitment to more effective stakeholder engagement, particularly with investors, audit committees and preparers, and to continued engagement with other audit regulators internationally; and
- Our evaluation of opportunities and risks associated with innovations in data analytics and technologies, and of the implications for audits and our own oversight activities.
Of course, we cannot succeed without our Staff. We are fortunate to have a team of highly dedicated and capable people. As set forth in our Plan, we are committed to further develop, empower and meaningfully engage our people and further cultivate a high-integrity, collaborative and inclusive culture.
Achieving our strategic objectives is enabled through our programs, operations and transformation initiatives. I have reviewed the associated spending amounts reflected in the 2020 Budget, which I believe are appropriate relative to the strategies we are executing.
Importantly, the 2020 Budget reflects targeted increases in the staffing of our Office of the Chief Auditor function, to appropriately support the anticipated project to update our Quality Control standards and the effective implementation of new standards, including Critical Audit Matters, Auditing Estimates and Using the Work of Specialists.
The Budget also provides for further prudent investments in our IT and data management capabilities and in the areas of enterprise risk management, compliance and information security.
As stewards of the fees collected to fund our efforts, we must operate as effectively and efficiently as possible. It is important, therefore, that we continue to optimize our program effectiveness, our internal processes and our information technology investments.
The PCAOB plays a critical role in our capital markets. I believe our Plan will make us more effective in our oversight and in achieving our mission of protecting investors.
I thank my fellow Board members, the entire PCAOB staff and the SEC for their collaboration and partnership over the past year, and I look forward to together making further progress in driving continuous improvement in audit quality.