FAST FORWARD Building the Profession of Tomorrow Reinforcing the Profession’s Commitment to...

FAST FORWARD Building the Profession of Tomorrow

Reinforcing the Profession’s Commitment to Quality

Sue Coffey, CPA, CGMASenior Vice President – Public Practice & Global Alliances Spring Council | May 18-20, 2014

#6

Long-standing History and Commitment to Quality and Public Protection

CPA exam

Standards setting

Guidance, tools, training, development, resources

Audit Quality Centers

Quality monitoring/peer review

Ethics enforcement

Thought leadership

Emerging Issues

Complexity in business and

underlying standards

Pace of change Continued audit relevance

Peer review and inspection results

Regulators’ scrutiny

Expanding services

Near-Term and Long-Term Quality Enhancements under Consideration

2-Phased Approach to Enhance QualityNear-Term Long-Term

Changes to professional standards and related implementation guidance

Practice Monitoring of the Future

New tools, development and resources (including Future of Learning, AQC activities, and CPEA)

Amendments to the existing peer review program

Regulator Engagement

Consideration of Professional Standards and Related Implementation Guidance

Assess/modify quality control standards/guidance• Considering greater specificity, particularly for audits of

regulated industries (e.g., EBP, Gov)• Considering incorporating certain AQC membership

requirements/best practices into QC standards or guidance

Monitor new clarified SASs and assess need for change

Enhance value and relevance of auditor reporting, including going concern and other information

Development of New Tools, Training and Resources

Identifying trends through peer review findings• Develop timely tools and education to improve audit quality

Future of Learning

Developing additional tools, training and resources• Competency-based curricula and related assessments• Alerts and guides• Audit Quality Center activities• Center for Plain English Accounting (CPEA)

Near-term Changes to Peer Review under Consideration

Enhance quality of peer reviewers

Evaluate “new” industry engagements promptly

Deepen review of high-risk industries and areas of concern

Create “SWAT” team

Make peer review results more informative

Principles for Practice Monitoring of the Future

Increased public protection through enhanced audit effectiveness via:

Earlier detection of engagement deficiencies

Systems that capture and include all firms that should be subject to review

Systems that capture and include all engagements that should be reviewed

Objectives of Practice Monitoring of the Future

More real-time and continuous process to detect issues earlier

Use of technology and people

Use of data from firms’ systems

Dashboard that is useful to firms and AICPA/external monitors

Transparency and usefulness to regulators and public

Checks and balances to include all firms and all A&A engagements

Continuous analytic

evaluation

Human

review

Intervention

Periodic Inspection

Oversight

Facetsof theConcept

Next StepsDiscussion document – summer 2014• Profession’s plans and ideas• Soliciting input from members and other stakeholders

Practice monitoring of the future – fall 2014• Concept paper release• Soliciting input from members and other stakeholders

Critical partnerships• State CPA societies• Regulatory community• Members

Copyright © 2014 American Institute of CPAs. All rights reserved.

Thank You

2014 AICPA Spring Council

Scottsdale, ArizonaMay 18-20, 2014