Technology is everywhere. As I was driving last week, I remembered how road trips used to require paper maps with highlighted routes – ones that didn’t tell you exactly where you made a wrong turn or how to fix it. And likewise, when I was in school, research that used to take hours at the library across multiple media – including sitting at a microfiche reader and scrolling through old clips – now takes place in a matter of minutes.
Indeed, technological innovation has so fundamentally changed how we operate in the course of our lifetimes that it feels like we should add it to the list of death and taxes as among life’s few certainties.
And while technology may make the performance of our responsibilities easier and more efficient, we should not allow it to erode our commitment to the fundamental principles that underlie our auditing framework.
Our third matter today upholds this precept. The requirement that auditors must plan and perform audit procedures to obtain sufficient appropriate evidence to support their opinion on a company’s financial statements remains unchanged and holds true whether technology-assisted analysis is used or not.[1] Today’s amendments advance that requirement by providing clarity on how to obtain relevant and reliable audit evidence if technology-assisted analysis is used.
I commend the staff at the PCAOB for taking the time to study the increased use of technology by both auditors and companies, and then crafting amendments that seek to advance high-quality audits and investor protection. The PCAOB staff’s work provides yet another example of how regulatory frameworks can complement the increased use of helpful technologies. I look forward to seeing how innovations in the audit profession will continue to grow and improve, to both serve investors and advance the public interest by promoting high-quality and accurate financial statements.
Relatedly, the ability to attract and retain young professionals is crucial to the future of the audit profession. Incorporating the use of analytical tools can further those goals so that professionals are not stuck using outmoded methodologies or bogged down in unnecessarily time-consuming processes. I hope that the amendments also facilitate progress on this important front.
Thank you again to the board members and staff of the PCAOB, and the staff within the Office of the Chief Accountant and all others at the SEC who contributed to today’s meeting and the matters we considered.
[1] See Amendments Related to Aspects of Designing and Performing Audit Procedures that Involve Technology Assisted Analysis of Information in Electronic Form, PCAOB Release No. 2024-007 at section III (June 12, 2024).
