SEC Interim Chief Accountant Letter on Auditing Profession Sustainability and PCAOB Recommendations

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
~ ~~ WASHINGTON, D.C. 20549 d
OFFICE OF THE
CHIEF ACCOUNTANT
October 13, 2016
Dr. Parveen Gupta
Mr. Lynn. E. Turner
Working Committee Co-Chairs
Investor Advisory Group
Public Company Accounting Oversight Board
Working Group on U.S. Treasury Advisory Committee on the Auditing Profession Dear Dr. Gupta and Mr. Turner:
This letter responds to your June 27, 201 b letter to Securities and Exchange Commission ("SEC") Chair Mary Jo White regarding the work of the Advisory Committee on the Auditing Profession ("ACAP") and the report it issued in 2008.' As I mentioned when we spoke recently, I strongly share the working group members' interest in- the sustainability of a strong and vibrant auditing profession. The credibility of financial reporting depends on thorough audits performed by independent auditors. I believe audit quality has improved during the close to 15 years since the passage of the Sarbanes-Oxley Act of 2002 and the creation of the Public Company Accounting Oversight Board ("PCAOB"), which is responsible for overseeing the audits and auditors of public companies and SEC registered broker-dealers. However, the hard work. of the PCAOB and others in the auditing profession continues, as is reflected in their robust and ongoing standard setting agendas. I also believe that the design of the PCAOB's inspections program., the focus on the importance of the audit committee's oversight role, and the improvement in the transparency of drivers of audit quality have all contributed to the improvements in audit quality. I believe it is very important for this positive momentum to continue to keep pace with investor expectations as well as new and emerging financial reporting risks. It is thus incumbent upon us to continue to monitor the current environment to identify and understand the issues to be addressed as well as the range of potential approaches to addressing those issues. ~ See Advisory Con~~nittee on the Auditing Profession Final Report (Oct. 6, 2008), available at ht~sJl~~~~~~w.treasury.Gov/aboutlor~a»izational-structure/of~ceslDocui~nents/final-re~ort.pdf (the "Final Report").