The Treasury Department's recently established Advisory Committee on the Auditing Profession can play a role in improving the usefulness of audits, said a letter from an audit profession watchdog group.
The Center for Audit Quality sent a letter to the committee outlining the progress the profession has made in the past five years since the passage of the Sarbanes-Oxley Act, including the establishment of the Public Company Accounting Oversight Board with its regular inspections of audit firms.
"In a relatively short span of time, and in many parts of the world, the profession has gone from being partially self-regulated to being independently regulated," said the letter, co-signed by James S. Turley, chair of the CAQ's governing board and chairman and CEO of Ernst & Young, and Cindy Fornelli, executive director of the group.
The CAQ noted that six in 10 investors now say they have more confidence in audited financial information than they once did. But the CAQ believes more work needs to be done. "While such improvements are noteworthy, it is clear that significant work lies ahead to maintain investor confidence in a rapidly changing marketplace," said the letter. "Today businesses are increasingly complex, contracts and transactions grow more complicated, and financial instruments are continually more sophisticated."
The CAQ said it supported the work of the Advisory Committee and believes it will provide an "opportunity to identify rational and realistic approaches that will result in a more sustainable audit profession for decades to come."
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