The Center for Audit Quality is an autonomous, nonpartisan, nonprofitpublic policyadvocacy organization based in Washington, DC. It is affiliated with the American Institute of CPAs. The CAQ is "dedicated to enhancing investor confidence and public trust in the global capital markets by fostering high quality performance by public company auditors; convening and collaborating with other stakeholders to advance the discussion of critical issues requiring action and intervention; and, advocating policies and standards that promote public company auditors' objectivity, effectiveness, and responsiveness to dynamic market conditions". Founded in 2007, the organization's first Executive Director was Cynthia M. Fornelli, a U.S. business leader and former securities lawyer. In May 2019, Julie Bell Lindsay became the CAQ's second Executive Director.
Membership and structure
The CAQ is self-supporting and entirely funded by member dues. Membership in the CAQ is open to U.S. accounting firms registered with the Public Company Accounting Oversight Board. Associate membership is available for U.S. accounting firms not registered with the PCAOB. The CAQ also offers international firm subscriptions.
Policy issues
The CAQ engages with regulators and auditing and accounting standards-setters on policy proposals and public company auditing issues. It also provides a forum for its member firms to discuss those issues, share perspectives, and formulate positions. The CAQ works on a wide range of public policy issues, including the following:
The auditor's reporting model
Audit quality indicators
The role of audit committees
Financial reporting fraud deterrence and detection
Accounting estimates and fair value
Financial disclosure
Auditor of the future
Data security and privacy
Sarbanes-Oxley Act implementation and PCAOB rulemaking
IFRS
Mandatory audit firm rotation
Going concern
Audit engagement partner identification
Corporate governance
Company use of non-GAAP accounting measures
Cybersecurity
Audit profession talent pipeline
The CAQ provides more information on the CAQ's policy work.
Resources on auditing, financial reporting, and corporate governance
The CAQ has produced a range of resources aimed at fostering high performance by public company auditors and enhancing investor confidence. These resources include guides, white papers, webcasts, and research studies.
Research
The CAQ facilitates research initiatives and provides independent funding of scholarly research projects to address new or significant issues relating to public company auditing and the capital markets. Since 2009, the CAQ through its Research Advisory Board, has annually funded independent academic research projects on auditing-related topics, including audit quality, professional judgment, professional skepticism, and the value of the audit. In 2013, the CAQ and the Auditing Section of the American Accounting Association created a joint program designed to facilitate accounting and auditing academics’ ability to obtain access to audit firm personnel to participate in their research projects. Other CAQ research efforts include:
: Published jointly by the CAQ and The Institute of Internal Auditors, a report capturing key points and takeaways from a series of 2014 roundtable meetings of internal auditors, external auditors, and audit committee chairs.
: Published jointly by the Center for Audit Quality and Audit Analytics, the Audit Committee Transparency Barometer presents findings from an extensive analysis of 2015 audit committee disclosures in proxy statements, measuring the robustness of these disclosures among S&P Composite 1500 companies.
: The Fraud-Resistant Organization: Tools, Traits, and Techniques to Deter and Detect Financial Reporting Fraud provides valuable information about the conditions that might make an organization more susceptible to fraud—and how to mitigate those conditions.
Conducted each year since 2007, the CAQ's Main Street Investor survey gauges investor confidence in U.S. capital markets, global capital markets, audited financial information, and investing in U.S. publicly traded companies.
: Analysis of the trends in and characteristics of restatements of public company financial statements provides useful information for all stakeholders in the capital markets.
