PwC recently released our January update to our Audit Quality Report to showcase how quality is embedded in our strategy, business and culture and to help build on our commitment to continuous improvement in our quality journey.
Included in the report is a progress update on the voluntary steps PwC is taking to enhance quality and help lead the profession into the future through our actions to enhance confidence initiative we announced this fall, including:
- Accountability: We are in the process of developing an annual public certification for our assurance practice — to be signed by certain firm leadership — regarding the design, evaluation and disclosure of information related to our system of quality management, including procedures related to ethics and independence. We have also completed several significant steps toward establishing compensation at risk provisions for firm leadership.
- Quality: We are exploring potential enhanced, risk-based procedures related to identifying and responding to the risk of potential fraud and performing a going concern evaluation. We are currently working toward piloting procedures to augment existing fraud inquiries, brainstorming and whistleblower program evaluations, as well as additional risk assessment procedures to evaluate a company’s longer-term business viability. As part of these pilots, we plan to consider potential expanded communications with the audit committee. We are also considering enhancements to our audit report to make it even more transparent and informative.
- Independence: We are in the process of establishing policies and practices to cease the provision of certain permitted “pure” consulting services to our SEC issuer audit clients — for example, providing advice and recommendations on company business strategies. However, we are not changing our approach to other types of permissible services such as audit, audit-related and tax services.
- Transparency: We are working to increase transparency over key aspects of audit quality performance, including enhancements to our annual audit quality report to provide additional KPIs and new reporting on potential conflicts of interest.
- Engagement: We are in the process of designing a series of initiatives to enhance engagement with key sets of stakeholders, including potential talent, audit committees and investors. With insights from investors and directors, we are designing key aspects of our investor center and audit committee institute. In addition, we increased our focus on existing and potential new activities at colleges and universities toward our commitment to spend one million hours raising awareness around careers in accounting and audit.
Learn more about PwC’s commitment to audit quality in our Audit Quality Report.