In recent remarks at the NACD’s Board Leadership Conference, Public Company Accounting Oversight Board member, Jeanette M. Franzel discussed the complementary roles of audit committees and the PCAOB in achieving high-quality, reliable audits to promote confidence in the securities markets.

Franzel proposed that audit committees may want to ask their auditors the following questions:

  • Was your company’s audit selected for PCAOB inspection? If yes, the audit committee may wish to receive regular updates on the scope and progress of the inspection; details about any deficiencies that were identified or other feedback received during the inspection; and if deficiencies were found, what additional actions are needed.
  • Did the PCAOB identify deficiencies in other audits that involved auditing or accounting issues similar to issues presented in your company’s audit? Audit committees may want to understand whether deficiencies found on similar audits could occur in their company’s audit, and what the audit firm is doing to prevent such deficiencies.
  • What were the audit firm’s responses to the PCAOB findings? What types of actions has the firm taken in response to specific Part I deficiencies or types of deficiencies?
  • What topics are included in Part II findings? Audit committees may want to ask about the quality control findings and the audit firm’s efforts and actions to address any quality control deficiencies. Audit committees may also want to inquire about the status of the PCAOB’s evaluation of the firm’s progress on remediation.

Click here to read the full transcript from the NACD Conference.If you have questions about this or any other matters, contact your Warren Averett partner, or any member of our SEC Practice Division at 813.229.2321.