The Public Company Accounting Oversight Board’s two-day Standing Advisory Group Meeting took place in Washington, DC on June 5-6. Topics included data and technology, cybersecurity, current and emerging audit issues, corporate culture and its implications for the audit, as well as the new auditor’s report.
The Standard Advisory Group (SAG) advises the PCAOB on the development of auditing and related professional practice standards. The SAG includes investors, auditors, audit committee members, public company executives, and others.
This was the first meeting of new PCAOB Board members, ushering in a new era of the PCAOB.
*John Bendl, Chief Accounting Officer, Treasurer, and Controller, The Vanguard Group, Inc.
*Rudolf Bless, Chief Accounting Officer, Bank of America
*Mary Hoeltzel, Vice President and Global Chief Accounting Officer, Cigna
*Guy Jubb, Honorary Professor, University of Edinburgh Business School
*Philip Lochner, Jr., Board Member of public companies
*Christopher Tower, National Managing Partner, Audit Quality and Professional Practice, BDO USA, LLP
The MACPA’s Executive Director/CEO, Tom Hood, and Rebekah Brown, Director of Development, conducted the presentation “Data and Technology Trends in the Profession.” In this period of exponential change, technological and otherwise, there are several significant challenges hovering around public accounting firms. These challenges and opportunities were presented and discussed during the MACPA session, hitting “Top 10 Technology Hard Trends Shaping the Profession” and other key points. Rebekah Brown’s “Aware, Predict, Adapt” message also came through loud and clear.
The bottom line is that CPA firms need to increase their future readiness in order to successfully navigate the fast future of change. In that spirit, Tom Hood’s statement that “robotics is predicted to automate or eliminate 40% of basic accounting work by 2020” made many attendees perk up their ears. The waves of changes are building as we speak — and these monumental shifts were soaked throughout the MACPA data and technology trends period.
In addition, SAG members discussed these cyber topics, among others:
*Perspectives of audit committee members on cyber risks
*How companies evaluate, manage, and respond to cyber risks and cyber incidents
*Implications of cyber risks and cyber incidents for financial reporting, including disclosure obligations in filings with the SEC
*Auditor responsibilities as part of an audit of financial statements or internal control over financial reporting (“ICFR”) related to cyber risks and cyber incidents
*How audit firms evaluate, manage, and respond to their own cyber risks and cyber incidents
Accounting firms of various sizes, including one large multinational firm, have reported data breaches, some of which exposed personally identifiable information of employees and clients.
Scattered throughout the days were discussions related to the skillsets required for the CPAs of the future; Bill Hinman of the SEC asking what firms are doing about protecting client data, and; Jon Lukomnik of the Investor Responsibility Research Center Institute touching on technological literacy.
The question “Can we change fast enough to deal with the realities of the marketplace?” was a central thought weaved in and out of the various topics of the two-day gathering.
Video and a summary of the discussions can be viewed here.
“In the next five years, game-changing technologies will transform every business process, including how we sell, market, communicate, collaborate, educate, train and innovate.”–Daniel Burrus