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The U.S. capital markets are core to U.S. business operations and success, and to our society at large. We are fortunate to have a robust ecosystem that helps safeguard the capital markets and at PwC, we're proud to be a part of that ecosystem, helping enhance the quality and confidence in the information that drives the capital markets.
We are committing to a series of bold actions over the next several years to further enhance the quality and confidence in the information that drives the capital markets. To achieve this, our U.S. firm will take actions to lead our profession across five key focus areas between 2024 through 2026.
Over the past few months, we have made significant progress related to our recent commitment to lead our profession with bold, voluntary actions in the areas of accountability, quality, independence, transparency and engagement.
Enhancing audit confidence levels in the profession
As part of the strategy, PwC is a first mover and proactively leading the profession across five focus areas that can further enhance confidence and trust in the independent audit.
Accountability
- Leadership certifications. Annually provide public certifications by senior firm management regarding the effectiveness of the firm-level system of quality controls.
- Compensation at risk. We have completed several significant steps toward establishing compensation at risk provisions for firm leadership.
Quality
- Fraud and going concern. 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 assess a company’s longer-term business viability.
- Additional firmwide training. Conduct additional firm-wide annual training on public interest and the role of the CPA in the capital markets, ethics, independence and objectivity, and fraud/going concern procedures.
- Enhanced audit report. Enhance the value of the audit report by expanding the content to cover a broader range of topics of interest to investors. Engage with stakeholders to seek additional input on enhancing the value of the audit report.
- Audit committee representation letter. Seek an audit representation-type letter from the audit committee chair, addressing matters of governance related to the audit engagement.
Independence
- Consulting services. Cease the provision of certain types of permitted “pure” consulting services that would typically fall under the "other" category in the proxy statement for our SEC-registered audit clients. We are not changing our approach to other types of permissible services that typically fall within the audit, audit-related or tax buckets of the proxy statement.
Transparency
- Enhanced audit quality report. Publish annually an enhanced audit quality report, including additional KPIs, as well as new conflicts of interest reporting. We are gathering and assessing feedback from numerous stakeholders regarding the form and content of our annual Audit Quality Report, including whether there are different or additional transparency data points that should be considered for inclusion in future reports.
Engagement
- Talent. Commitment of 1 million hours for a multi-year campaign to raise awareness of careers in accounting and audit. We have also increased our focus on existing and potential new activities at colleges and universities – including presentations to students and faculty – and planning additional investments in marketing the profession to attract new talent.
- Investor center. Establish an investor center for investor advocacy and host an annual investor day. With insights from investors and directors, we have established a value proposition and begun designing key aspects of our investor center and audit committee institute.
- Audit Committee Institute. Establish an institute to provide training on our role as independent accountants.
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To learn more, reach out to your PwC audit partner or get in touch here
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