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Issue link: https://cpapracticeadvisor.epubxp.com/i/160971
FEATURE Complying with the PCAOB: The Various Options for Independence Training C By Mike Mirretti, CPA onducting regular, systematic audits is essential for holding public companies accountable for their decisions and financial records. Monitoring, evaluating and managing public corporations is arguably the most efective way to placate stakeholders. But who ensures that audits are always conducted properly, fairly and thoroughly? In other words, who audits the auditors? Te Public Company Accounting Oversight Board (PCAOB) regulates accounting firms that audit public companies in order to maintain certain standards. Not only does the PCAOB serve to protect the interest of investors but it also, along with the FASB, restores confdence in public fnancial reporting. Tese businesses are the keepers of our investments. It is essential to the system's vitality that auditors consistently prepare informative and accurate audit reports. Terefore, while these regulations create additional obstacles for frms, they are necessary components of the business. One simple way to stay in good standing with the PCAOB is by commiting all independent auditors to standard independence training courses. Continuing education is a reasonable guideline to impose as auditors hold themselves accountable for their own profciency; all of which is predicated upon instruction and experience. Because the training is not highly defned, frms tend to adopt diferent training models, diferent programs and completion requirements for their staff. Regardless, independence training must be completed by all auditors of publicly held companies to ensure proper professional judgment and to remain in compliance with the PCAOB. "In general, frms will adopt one of two models for independence training" says Richard Slusz, Global Accounts Manager at Becker Professional Education. The first model requires all staf involved in public audits to complete independence training courses every three or four years. Staf will submit to training –one extended session or a combination of several – every few years to ensure employees have necessary education and experience to perform their jobs. "Te biggest frms, including The Big Four, typically follow this model and assign one holistic course to the entire company during a specifc time period every third year" adds Slusz. New hires complete the course during the off years and then again with the entire frm as a whole. Te second model follows a less stringent format, allowing staff to complete training just once upon hire or after being brought on through acquisition. Te frm then designates mandatory follow up sessions on a regular basis for technical and strategical updates. Because "regular basis" is defned by the individual frm, it allows for some fexibility. Regional frms have an easier time using this model due to smaller staf size. So, why is it imperative that a frm implement independence courses? Te answer to that is quite simple: staying in compliance with the PCAOB is critical for maintaining credibility and value as a frm. An u n f l at ter i ng pe er re v ie w c a n instantly blacklist a frm and defame its reputation. What's more, it is in the frm's best interest to not only require independence training but also to provide staff with a high qualit y, high content course; a course at the forefront of developments within the business. Firms must choose between using a course already available like those created by Becker Professional Education and developing their own propriety course. "A lot of times, c re at i ng you r ow n mode l for training isn't the most cost efective approach as costs tend to add up quickly" says Slusz. "At Becker, we saw this problem and wanted to develop a simple yet constructive set of curriculum that frms could trust. So, we listened to the market place and built the most engaging, animated and comprehensive program possible." Without strict guidelines from the PCAOB, frms are lef with a number of options and must consider fnancial risk, quality control and effectiveness of the various training sessions available. Trust in the independent auditor clearly holds a signifcant amount of value and weight. Te objectivity, skill and education of an auditor should constantly improve to avoid defciencies in the frm's operations. PCAOB inspections along with regular peer reviews protect audit quality for investors and encourage best practice among frms. Continued Professional Education, or CPE, has changed over the past several years and now focuses on a more dedicated learning and development process for firms and their employees. It is essential that frms respect the guidelines set forth by the PCAOB, adhere to those standards and adopt a method and training course for their staf as a result. Mike Mirreti, CPA is the Senior Product Manager for Becker Professional Education. September 2013 • www.CPAPracticeAdvisor.com 35