A PDF of the below Comment Letter can be downloaded here »
Phoebe W. Brown
Office of the Secretary
Public Company Accounting Oversight Board
1666 K Street NW
Washington, DC 20006-2803
Re: Request for Public Comment on Strategic Priorities (PCAOB No. 2026-001)
Dear Ms. Brown,
This letter is submitted by Financial Executives International’s (“FEI”) Committee on Corporate Reporting (“CCR”) in response to the Public Company Accounting Oversight Board’s (“PCAOB” or “Board”) request for comment on its strategic priorities.
FEI is a leading international organization comprised of members who hold positions as Chief Financial Officers, Chief Accounting Officers, Controllers, Treasurers, and Tax Executives at companies in every major industry. CCR is FEI’s technical committee of approximately 50 Chief Accounting Officers (“CAOs”) and Corporate Controllers from Fortune 100 and other large public companies, representing more than $19 trillion in market capitalization. CCR reviews and responds to pronouncements, proposed rules and regulations, pending legislation, and other documents issued by domestic and international regulators and organizations such as the SEC, PCAOB, FASB, and IASB.
Executive Summary
The Committee would first like to welcome the new PCAOB Chair and Board members. We also would like to acknowledge Board member George Botic for his work as interim Chair, and his engagement with CCR during this transitional period. We look forward to building a strong relationship with the Board in the coming years.
We are particularly encouraged by Chair Logothetis’ recent remarks highlighting the “A-C-T framework” and the Board’s dedicated focus on clarity. We support the PCAOB’s proactive steps to design a formal consultation process within the Office of the Chief Auditor (OCA) to provide timely guidance on complex or novel auditing issues. Furthermore, CCR applauds the launch of the Audit Practitioner Fellowship Program. We agree with Chair Logothetis’ views on the importance of bringing recent, real-world perspectives into the PCAOB – and believe this will be a critical step forward for the Board to address current and identify future auditing challenges. Finally, we appreciate the outlined commitment to strengthening engagement with preparers and other key stakeholders, recognizing that high-quality auditing is a shared endeavor. The Board’s initiation of a public outreach to inform its future agenda clearly demonstrates a “new era” for stakeholder collaboration, dialogue and connectivity.
CCR greatly appreciates the opportunity to engage with the Board as it considers its strategic priorities. While the PCAOB is not the direct regulator of financial statement preparers, the Board’s inspection program, rulemaking and standard-setting activities significantly influence the manner in which external auditors perform audits and interact with management and audit committees. Consequently, we believe it is essential to engage with the Board regarding its priorities as we continue to strive for high-quality and efficient audits.
To help inform and guide the development of the Board’s 2026-2030 Strategic Plan, our commentary identifies four priorities we believe the Board should address. Please note we have responded with core themes, rather than addressing each discrete question posed by the Board. We encourage the Board to complement our feedback with direct dialogue from the broader stakeholder community, particularly as it relates to questions that do not closely intersect with the financial statement preparers’ purview. To facilitate the Board’s review of our priorities, we have thematically mapped our priorities to the Board’s inquiries within the Appendix.
CCR would be pleased to meet with the Board and Staff as it refines the PCAOB’s strategic priorities.
Strategic Priorities – Recommended Focus Areas
CCR recommends the Board prioritize its strategic initiatives across four key themes (1) Materiality, (2) Technology and AI Usage, (3) Transparency and Engagement, and (4) Inspection Reports. We have described each theme below and would welcome a future discussion with the Board and Staff to dive deeper. Additionally, given the diversity in individual preparer views, the themes are not prioritized.
Theme 1: Materiality
We believe that over time – in both financial reporting and auditing – the original intent of materiality, as established by the Supreme Court, has been misconstrued. In practice, inconsistent application at times results in management, auditors, audit committees and other stakeholders placing undue focus on information that is not decision-useful for investors.
With respect to audits, we encourage the PCAOB to reassess its expectations as to how auditors consider materiality, to ensure their focus is centered on decision-useful information. As one noteworthy example, we believe the Board could reconsider its views on the application of the “clearly trivial” provisions of AS 2810.
Theme 2: Technology and AI Usage
Both preparers and auditors are incorporating transformative technological innovations, including emerging Artificial Intelligence (AI) capabilities, into their financial reporting and auditing processes. In this period of rapid technological change, it is crucial for the PCAOB to remain current in its understanding of new tools and use cases to ensure that its auditing standards remain fit-for-purpose.
To meet this objective, we believe it is important for the PCAOB to engage collaboratively across all major stakeholders – including auditors, preparers, other regulators and standard setters and investors – and evaluate where changes to the standards or additional guidance may be appropriate. We believe detailed review by the PCAOB on this issue will allow for significant quality and efficiency benefits of new technologies to be realized, and allow for emerging risks to be sufficiently mitigated.
Reconstituting its technology working group could be a helpful first step to inform the PCAOB’s evaluation of the technological environment and the overall durability of the auditing standards.
Theme 3: Transparency and Engagement
We commend the PCAOB’s commitment to enhanced transparency and improved stakeholder outreach efforts, as evidenced by this request for public comment. We recognize the challenge the Board faces amidst competing interests and diverging views, and appreciate the complexity of this undertaking.
We encourage the Board to maintain its commitment to open dialogue and public feedback. Additionally, we recommend the Board consider implementing cross-stakeholder roundtables, which we have found to be very effective and valuable. CCR would welcome the opportunity to engage with other members of the accounting, reporting and auditing ecosystem, as well as the investor community, to facilitate effective and cost-beneficial standard setting.
Finally, we encourage the Board to continue exploring opportunities to enhance transparency throughout the standard-setting process. We believe greater visibility will further strengthen stakeholder confidence and durability of the PCAOB’s standards.
Theme 4: Inspection Reports
Finally, we support the Board’s interest in revisiting the content and form of inspection reports. As CAOs and Controllers, we use the reports in our communications with our audit committees and have experienced challenges articulating the broader implications of inspection results as currently presented.
While reporting on the PCAOB’s inspection of individual engagements provides information, shifting the focus of reports to firm-level quality control – rather than individual engagements – may be more meaningful to non-auditor users.
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As described above, CCR is primarily comprised of Fortune 100 companies representing a diverse array of industries. Our comment letter drafting and governance procedures are designed to capture the general consensus of CCR. While this letter reflects such broad consensus, it does not necessarily represent the views of each individual member. To the extent that affiliated companies or individuals hold differing views on the specific recommendations included in this letter, we encourage them to submit separate comments and/or engage with the Board directly.
CCR appreciates the PCAOB’s consideration of our comments and welcomes the opportunity to discuss our viewpoints with the Board and Staff should it be helpful to your standard setting and prioritization process.
Sincerely,
FEI's Committee on Corporate Reporting