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The “P” in CPA: Understanding auditors’ responsibility to the public

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People everywhere want some measure of assurance — something they can trust. Confidence in the quality of information is necessary for a complex society to function, and markets operate most efficiently when there’s reliable, quality information stakeholders can use to make decisions. And accountants — specifically Certified Public Accountants (CPAs) — play a key role in earning that trust. 

Assurance delivered by trusted auditors — who are independent and objective — is a cornerstone for the health of our financial and capital markets, our economy, and, in a certain respect, the well-being of our society. I believe CPAs’ role is noble and critical. Here’s why. 

What is the “P” in CPA?

If there’s one thing I’ve learned throughout my career at PwC and the SEC, it’s that the “P” in “CPA” has never been more important. CPA is the license given to accountants who meet education, examination and experience requirements. The key here is the public. CPAs have a responsibility to stakeholders throughout the capital markets to provide high-quality, credible information they can rely on to make decisions — regardless of whether they’re working in the public or private sector, as a preparer, auditor, regulator or more. 

And to me, the “P” has an additional meaning — purpose. At PwC, our purpose is to build trust in society and solve important problems. That is why we restructured our business into Trust Solutions and Consulting Solutions to combine all of our services that relate to building trust for both the buyer and public users of those services — including assurance and tax policy compliance. These services provide critical information that stakeholders should be able to rely on and have confidence that it’s right. They are inherently trust-oriented.

Why it matters

What does this mean? When CPAs complete financial statement audits or provide assurance over other information, these reports are designed for public use — not just for company management or shareholders. And that distinction is critical. While non-CPA accountants provide similar services, any deliverables are addressed to company management. They are not held to the same standards as CPAs, and the information is not designed for external stakeholders to leverage in decision making. 

In a time when trust is more important than ever — and more difficult to build and retain as companies look to address the needs of multiple stakeholder groups — providing the highest standards and consistently reliable information is crucial in building trust in our capital markets. Independent assurance can help identify and resolve quality issues for investors, broadening access to the benefits of structured, machine-readable data.

How we move forward

There is growing demand from investors, regulators and other stakeholders for companies to disclose additional information outside of historical financial statements — and this new data, if material, should be held to the same quality standards as financial information. CPAs, who have the proper expertise and independence, are well positioned to provide assurance over more business areas to increase confidence and value in information. 

I believe the profession’s expertise and integrity can provide additional investor protections and market quality over areas such as for environmental, social and governance (ESG) information, eXtensible Business Reporting Language (XBRL) tagging, benchmark data, cyber risk management and other vital market information. These areas previously have not often received external assurance, which may lead to costs for information users and the markets more broadly.

As the world, business and technology continue to evolve, we all must continue to challenge ourselves about how trust is earned and delivered. And as CPAs, we must ask ourselves important questions: Do we have a culture that embraces our public responsibility? Where else could assurance benefit investors and the public? Investors, regulators and other stakeholders continue to demand increased transparency from companies around information outside traditional financial disclosures, and as businesses move to meet these expectations, CPAs — and the assurance we provide — have an important role to play. 

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