A useful regular publication from the PCAOB is its report about conversations with audit committee chairs – here’s the most recent report. The report has a load of anecdotes that are worthy of noting – I took the liberty of creating my top 10 list from it:
1. No surprises – ever: Audit chairs appreciate frequent, transparent communication. If something could be awkward later, bring it up now.
2. Proactive outreach from the audit partner: They don’t want passive auditors. They want partners who flag issues early and often. Think: “Here’s what’s coming around the corner”; not “Here’s what just hit us.”
3. Consistency plus industry expertise on the audit team: Low turnover and deep company knowledge translates into more trust and better audits. Chairs notice when the team changes every year – and not in a good way.
4. A culture of continuous improvement (yes, even for auditors): Audit firms are expected to evolve – particularly on tech, communication and fee transparency.
5. A meaningful (not check-the-box) auditor assessment process: Most committees evaluate auditors annually using: management and committee feedback, surveys, firm self-assessments and external data (e.g. PCAOB inspection reports). Chairs want a 360° view of audit quality, not just “they showed up on time.”
6. Real insight from PCAOB inspection reports: Audit committee chairs look at deficiency trends, peer comparisons and red flags – but they rely heavily on audit firms to interpret this data. “Don’t just hand me the report—tell me what it means for us.”
7. Tight control over auditor independence: Audit committee chairs want:
- Detailed pre-approval info (scope, fees, independence impact)
- Conservative use of non-audit services
- Efficient interim approvals when needed
8. Serious attention to fraud risks: Audit committee chairs want to talk about fraud risks regularly, including whistleblower activity, management override, revenue recognition and cyber-enabled fraud.
9. Confidence in the audit firm’s quality control systems: Audit committee chairs want visibility into staffing and expertise, National office involvement, independence monitoring and remediation of deficiencies. Chairs are basically asking: “Is this audit firm built to deliver quality every time?”
10. Robust, ongoing dialogue on complex and emerging risks: Audit committee chairs increasingly are curious – and skeptical – about AI in auditing. And they’re also interested in: critical audit matters (CAMs), cybersecurity and tech used in the audit itself.
By the way, you may also want to check out this recent CAQ report entitled “Voices from the audit committee: A supplemental report.”
Authored by
Broc Romanek