The Center for Audit Quality: Auditors Vision in Motion A Presentation to the 38 th Meeting of the International Auditing and Assurance Standards Board March 18,

Enhancing confidence and trust by… Fostering high quality performance by public company auditors Convening and collaborating with other stakeholders to advance the discussion of critical issues Advocating policies and standards that promote public company auditors objectivity, effectiveness and responsiveness to dynamic market conditions 2

CAQs Individual Investor Survey 73% Confidence in U.S. capital markets 75% Confidence investing in U.S. publicly traded companies 70% Confidence in audited financial information released by publicly traded companies 3

The Public Policy Challenge 4

Regulatory Challenges – The Threat to Audit Quality Assault on Fair Value AccountingDebate over Independent Standard SettingCriticism of the Sarbanes-Oxley Act 5

The CAQs Commitment to Audit Quality 6

7 The CAQs Anti-Fraud Initiative Deterring and detecting fraud is a shared responsibility Tone at the top is critical Boards and audit committees must maintain skepticism SOX has created environments that are less conducive to fraud

8 Audit Research Research Advisory Board promotes credible and timely research on audit-related topics 2009: 5 projects awarded $130,000 in funding 2010: 37 responses to our latest RFP; up to $200,000 in funding available Research symposia explore link between audit research and practice

9 IFRS CAQ pleased by SECs support for a single set of high-quality global standards Have encouraged SEC to execute its Work Plan so it can make a positive decision in 2011 Our Guide to IFRS is a balanced overview of the challenges and opportunities

In Conclusion The profession has made great strides in improving public company audit quality Regulators and standard setters are subject to heightened scrutiny, if not outright criticism CAQ will remain active, in collaboration with stakeholders Our work – including Anti-Fraud Initiative – continues 10

Cindy Fornelli Executive Director Center for Audit Quality 11