Audit lobby group formed to combat Sarbox beef-up

A group of America's largest firms has joined forces to found the Center for Audit Quality (CAQ) in a bid to restore corporate confidence in the profession.

The move comes as auditors and companies prepare to adjust to significant changes to the implementation of the Sarbanes-Oxley compliance and audit law, which have been unveiled by the Securities and Exchange Commission and the Public Company Accounting Oversight Board in recent weeks.

Accounting professionals will dominate the new organisation's 12-member board. Seven seats will be held by the head of the American Institute of Certified Public Accountants and the chief executives of the six largest audit firms, with two seats rotating among smaller and mid-tier firms. Three public board members will be named shortly, the Dow Jones reported.  

Already named to the board are AICPA Chief Executive Barry Melancon, BDO Seidman chief executive Jack Weisbaum, Crowe Chizek and Co CEO Mark Hildebrand, Deloitte & Touche CEO James Quigley, Ernst & Young chairman and CEO James Turley, Grant Thornton CEO Ed Nusbaum, KPMG Chairman and chief executive Timothy Flynn, McGladrey & Pullen managing partner David Scudder and PricewaterhouseCoopers chairman Dennis Nally.

CAQ executive director Cindy Fornelli believes that accounting firms had addressed the fact that 'people lost confidence in our public marketplace' after corporate accounting scandals. She said that firms want to tackle the problem head-on by improving audit quality and working with regulators and investors to consider ways to improve corporate financial reports.