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Looking Ahead: the Next 10 Years - EY - United States

The Sarbanes-Oxley Act at 10

Looking Ahead: the Next 10 Years

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As companies continue to operate in more volatile, dynamic and global market conditions, audits will become increasingly complex – and even more critical to investor confidence. For this reason, we strongly support a broad spectrum of efforts to improve audit quality and strengthen corporate governance.

  • We support enhancements to existing professional standards that strengthen audit quality as well as the relevance, reliability and transparency of the audit process to investors, such as the recently adopted standards related to the auditor’s identification, assessment and response to the risks of material misstatement and engagement quality review.
  • We expect to see an increase in the identification, sharing and adoption of audit committees leading practices, including how audit committees promote auditor skepticism and objectivity, based on 10 years of audit committee experience since the passage of SOX.
  • The PCAOB has a number of current initiatives that are intended to have a positive impact on audit quality, such as enhancements to the standards related to auditor communications with the audit committee, the auditor’s reporting model, the auditor’s consideration of related parties and the evaluation of fair value measurements.
  • We expect to see increasing cooperation among audit regulators, many of which have been created since the passage of SOX.
  • We also expect to see continued analysis of the root cause of common audit deficiencies, both by the PCAOB and by audit firms.

Withstanding the test of time
While SOX put in place numerous improvements with respect to auditor oversight and independence, we believe that achieving and maintaining audit quality requires a process of continuous improvement.

Moving forward, we reaffirm our commitment to build upon the foundation established by SOX by working with the PCAOB, independent audit committees and shareholders. As the 10th anniversary of the Sarbanes-Oxley Act of 2002 approaches, we encourage a closer look at its provisions and impact, which we believe will stand the test of time.

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