November 12, 2015

CAQ Alert: 2015 Audit Resource for Auditors & Companies

The CAQ recently released this Alert addressing select auditing considerations for the 2015 audit cycle, many of which were also identified by the PCAOB in its recently issued Inspection Brief. Although logically oriented toward auditors, the Alert is equally instructive for the typically multiple company representatives involved in the audit process. Among other things, the Alert does a nice job of outlining in a plain English fashion the auditor’s scope of responsibility relative to the company’s cybersecurity and related party transactions pursuant to the fairly new PCAOB AS 18.

The Alert includes a discussion of these key topical areas:

  • Professional skepticism
  • Internal Control over Financial Reporting
  • Risk Assessment and Audit Planning
  • Supervision of Other Auditors and Multi-Location Audit Engagements
  • Testing Issuer-Prepared Data and Reports
  • Cybersecurity
  • Revenue recognition
  • Auditing Accounting Estimates, Including Fair Value Measurements
  • Related Parties and Significant Unusual Transactions

Relatedly, the CAQ submitted this comment letter to the PCAOB in response to the PCAOB’s Audit Quality Indicators Concept Release, making a strong case for audit committee-determination of (rather than regulatory-mandated) AQIs – which the CAQ indicates should be used and reported only voluntarily, in the context of learnings attained from its own AQI initiative.

See these additional comment letters on the Concept Release, and this PCAOB Dialogues AQIs podcast. Note that the initial comment period for the release closed at the end of September, but (purportedly consistent with its standard practice) the Board announced that it is reopening the comment period until November 30th to provide further opportunity for comment – including on any new information that becomes available as a result of a PCAOB Standing Advisory Group meeting being held today and tomorrow, which will focus largely on the PCAOB’s AQI initiative and emerging issues.

Check out our oodles of additional helpful resources in our “Auditing Process” Practice Area, as well as specific topical Practice Areas, e.g., “Cybersecurity,” “Internal Controls,” and “Related Party Transactions.”

SEC Comment Letters & Trends

Deloitte recently issued this report on SEC comment letters, which contains (among other helpful information) extracts of SEC comment letters, links to relevant related resources, an analysis of staff comments to help companies understand trends and improve their financial statements and disclosures, and a best practice checklist for managing unresolved SEC comments. Disclosure topics covered include MD&A, non-GAAP measures, disclosure controls & procedures and ICFR, and executive compensation and other proxy disclosures.

This report is among the many useful resources in our “SEC Comment Process & Analysis” Practice Area.

More on “The Mentor Blog”

We continue to post new items daily on our blog – “The Mentor Blog” – for members. Members can sign up to get that blog pushed out to them via email whenever there is a new entry by simply inputting their email address on the left side of that blog. Here are some of the latest entries:

– New & Departing D&O Checklists
– Auditor Independence: Deloitte Violation Serves as Good Director Compliance Reminder
– Hey There Fellow Securities Defense Lawyers: Omnicare is GOOD for Us!
– Pre-IPO Share Selling Under Scrutiny?
– Proxy Puts: Declining Use in Credit Agreements


– by Randi Val Morrison