Our focus on audit quality 2015 www.pwc.com

www.pwc.com
Our focus on audit quality
2015
Table of contents
Opening message
1
Our technology
Aura v6
Our culture and values
2
Tone at the top
2
22
22
Connect22
Halo/Data auditing
23
Accountability3
Ethics, independence, and objectivity
4
Considerations in undertaking an
audit engagement
5
Multi-disciplinary firm
6
Our people
8
Human capital strategies
8
Our diversity and inclusion strategy
11
Learning and development
14
Our approach
16
Audit methodology and processes
16
Resource management
17
Consultation process and use of specialists
17
Quality Review Partner
20
Engagement Performance & Quality
20
Global network
21
Quality across the network
21
Our monitoring
24
Continuous improvement cycle
24
In-process reviews
25
Internal inspections
25
External inspections
27
Analysis of quality drivers
29
Stakeholder engagement
Professional and regulatory
30
31
Appendix32
Legal and governance structure
32
To capital market stakeholders
Bob Moritz
US Senior Partner
Vin Colman
US Assurance Leader
Quality; Transparency; Innovation.
These are critical, interrelated
elements of executing our Purpose:
building trust in society and solving
important problems. As auditors, trust
is the vital element that translates
the work we do into confidence in
the capital markets. The question
we ask ourselves, and that we are
asked by our stakeholders, is how we
build that trust. Like most things in
life, trust is not given, it is earned.
Our Purpose helps describe who
we are, articulate our dedication
to the work we do, and explain
our commitment to tomorrow’s
solutions. We view the opportunity
to work with our clients to build
trust in society as a privilege—
one that requires a laser focus on
delivering quality, being transparent
about our processes, continuously
investing in innovation, and further
developing the competencies to
solve important problems.
We are proud of the quality of our
audits and, in particular, the progress
we have continued to make. We are
committed to remaining proactive
in advancing audit quality. With
significant investments in technology,
enhancements in processes, and
thoughtful development of our
people, we’re doing just that—
realizing a new era of auditing that
will enable us to sustain and build
on our recent quality results.
More and more the public, regulators,
and governmental organizations
have come to expect enhanced
transparency from businesses,
institutions, and individuals. This
demand for transparency extends
to our profession as well.
We are supportive of transparency
where the benefits exceed the costs,
the disclosures are substantive
and not boilerplate, and the
unintended consequences are
minimized. Specifically, to further
this objective, as a Firm we have:
• led the profession by supporting
the naming of the engagement
partner outside the audit report;
• supported the objective of
enhancing the auditor’s report; and
• supported the PCAOB’s efforts to
continue discussions regarding
the best use of audit quality
indicators through their concept
release and related efforts, and
have included voluntary disclosure
of transparency data points in
our quality reports since 2013.
Our Purpose is not a tagline or a
slogan. It’s a guiding principle that
helps align the focus of our people
and influences the decisions we make
and the actions we take. We take
pride in what we have accomplished
and are pleased to present you
with our 2015 audit quality report.
This report includes an increased
number of transparency data points
and a discussion of factors that may
have an impact on audit quality,
and describes where we are making
enhancements. We also detail the
investments we have made—and are
continuing to make—in our people,
our approach, and our technology.
We hope you find our commitment
to audit quality strong, the
transparency of our discussions
helpful, and our level of investment
and innovation exciting.
PwC
1
Our culture and values
Tone at the top
We deliver high-quality audits in a
manner consistent with the ethical
standards and expectations of our
profession. Ethical behavior and
consistent quality are crucial to
everything that we do. We would not
have a seat at the table without it.
Our philosophy supports all of our
actions—from selecting with whom
we will do business, to assembling
the best resources to perform high
quality audits within a regulatory
framework, to standing behind
our work. We remain committed
to our important role in the capital
markets and, as such, we continue
to invest in delivering independent
and objective high-quality audits.
Our Purpose helps guide our
decision-making process and set
the proper tone. It provides a lens
through which we make decisions
on investments in our people, our
approach, and our technology. And,
it helps guide how we manage issues,
make significant judgments, and help
clients navigate complex situations.
It is expected that our partners and
staff fully embrace and exhibit the
concepts underlying our Purpose:
integrity, objectivity, independence,
professionalism, and accountability.
Communication and transparency
play an important role in reinforcing
our Purpose and our strategic
priorities. Key messages are conveyed
by our Senior Partner, our US
Leadership Team, our Assurance
Leadership Team, and our Sector
Leaders. In addition, recognizing the
significant impact local leadership
can have in setting the right tone,
these messages are reinforced and
modeled by our local leadership
and engagement partners.
Throughout the Firm, we have
regular, ongoing quality-related
discussions to gain insights into what
we are doing well, where we can
continue to improve, and specific
actions expected to achieve those
enhancements. These discussions
occur through a variety of channels,
including town hall meetings,
webcasts, leadership visits, and, most
importantly, individual coaching. To
assess the impact and consistency
of these communications, we
periodically perform confidential
surveys of our partners and staff. The
results of these surveys demonstrate
that our communications efforts
are effective in reinforcing the
importance of audit quality.
Percentage of audit
professionals1 who report
receiving consistent messages
about the importance of audit
quality from both local and
Firm leadership:
FY15 greater than 99%
FY14
99%
FY13
98%
Our culture means that we share
our successes and also focus on
continuous improvement. We can
only be successful delivering high
quality audits when we focus on each
of the components of our system
of quality control, including our
leadership, ethics and independence
programs, human capital strategies,
learning and development, audit
methodology, resource management,
and monitoring programs.
“Quality is fundamental to sustaining our brand and the value
we deliver to our clients and represent to the capital markets, the
investment community, and other stakeholders…and is inherent
in our Purpose.”
—FY15 and beyond; Executive Summary; Assurance Strategic Priorities
1 The use of the term “audit professionals” throughout this document refers to our core audit partners and staff (e.g., risk assurance and other specialists are excluded).
2
Our focus on audit quality
Our audit partners have adopted
Audit Quality Principles to make
clear to one another and our
staff what we mean by “audit
quality.” At PwC, a quality
audit means consistently:
• complying with auditing
standards;
• applying a deep and broad
understanding of our
client’s business and the
financial environment in
which they operate;
• using our expertise to raise
and resolve issues early; and
• exercising professional skepticism
in all aspects of our work.
Our Audit Quality Principles
are achieved through our
Audit Quality Practices. These
practices include the following:
Again, confidential surveys help us
monitor whether the combination of
our actions and words are effectively
conveying the importance of quality
to the success of our Firm and each
of our professionals. The results
of these surveys demonstrate
that our people understand
our audit quality objectives.
Percentage of audit
professionals reporting
that they understand the
practice’s objectives
regarding audit quality
FY15 97%
FY14
97%
FY13
97%
• We ask tough questions
Accountability
• We stay current on
professional standards
Trust and accountability go handin-hand. Our partners have adopted
a system of accountability for
themselves and our staff as a key
component of audit quality. At PwC,
all of our professionals involved
in the audit process are expected
to contribute to the achievement
of sustained audit quality. We
provide our professionals with
guidance on the Firm’s expectations
that clearly communicates their
responsibility and accountability
for providing quality audits.
• We apply an objective and
professionally skeptical mindset
• We aspire to be the audit
committee’s independent
“eyes and ears”
• We plan our work in a timely
and thorough fashion
• We embrace the review and
supervision process as a way
to continuously improve
• We recognize our role in
the capital markets
• We are alert for issues that need
deeper analysis and we speak up
• We take personal responsibility
Leadership responsibilities
Our Assurance Leadership includes
partners who oversee parts of our
audit practice in various regions,
markets, industry groups, and
business units. Their responsibilities
may include implementing and
monitoring our audit quality
initiatives and overseeing our system
of quality control. For example,
they may assist audit partners in
making key decisions that have
quality implications, monitor partner
assignments and responsibilities,
and monitor attendance at
required training courses.
Partner accountability
and compensation
Each partner receives a share of the
Firm’s profits based on his or her
level of responsibility within the
Firm, the Firm’s performance, and
the partner’s performance. Each
partner is evaluated in four areas:
quality, people, partnership and
teamwork, and profitable growth.
Individual partner accomplishments
are measured based on the partner’s
relative performance against
established goals. Consistent
with professional standards, our
audit partners are not evaluated
or compensated for selling nonaudit services to audit clients.
Quality and other aspects of the
partner’s performance are carefully
considered in determining a partner’s
income. Conversely, quality-related
matters can have a negative financial
impact on lead engagement partners,
as well as auxiliary partners,
Quality Review Partners, and those
providing specialist (e.g., tax,
valuation, actuarial, information
technology) support. Inconsistent
audit quality may also result in
reduced responsibilities. In addition,
in order to promptly address quality
issues identified, the applicable
leaders work with the partner to
implement a responsive action plan,
and monitor the implementation
and effectiveness of that plan.
PwC
3
Non-partner professionals
As with our partners’ annual
assessments, our evaluation of
our non-partner professionals’
performance incorporates the Firm’s
quality objectives. Individuals are
assessed against the dimensions of
the PwC Professional framework,
which is further discussed on page 8.
For those who work on audits, this
includes assessment in the areas of
accounting and technical knowledge,
auditing skills, professional
skepticism, issues management, and
review and supervision. Our nonpartner professionals participate in
a performance bonus plan that is
based, in part, on the achievement
of quality goals and objectives.
If our audit quality objectives are not
fully met by non-partner professionals
at the manager level or above, they
must develop a responsive action
plan that is reviewed by a leader
who has oversight of the individual.
Our goal is to provide the specific
support and resources necessary for
the individual to deliver against our
audit quality objectives in the future.
Over the course of the fiscal year,
their progress is monitored by the
individual’s market team leader.
Ethics, independence,
and objectivity
Ethics
Ethical behavior is the foundation for
trust. We have established a code of
conduct and supporting policies that
describe the behaviors expected of
4
Our focus on audit quality
our partners and professionals. We
also provide our people with multiple
ways to ask questions or voice
concerns, including an anonymous
ethics and compliance HelpLine,
and a confidential e-mail process.
Protecting client confidentiality
and preserving necessary records
are also key components of
our ethics policies. We have
policies prohibiting the misuse of
confidential client information
(e.g., information concerning nonpublic deals) in all formats (e.g.,
email, oral communications, printed
documents), and we continue
to invest in new processes and
technology to safeguard confidential
information. These policies are
included in training for all new hires,
are reinforced as part of required
annual training, and are included
in annual compliance confirmations
required of all partners and staff.
Independence and objectivity
One key characteristic that
distinguishes the auditor from
nearly all other professionals
is the requirement that we are
independent from our audit clients.
It is this independence—in fact and
appearance—that facilitates our
exercise of professional skepticism
and ability to objectively arrive
at conclusions without being
affected by influences that could
compromise our professional
judgment. And it is this independence
that supports confidence in
audited financial statements.
The Firm’s independence policy
is based on the Code of Ethics for
Professional Accountants of the
International Ethics Standards
Board for Accountants, and is
supplemented, as necessary, to
comply with the requirements of
US standard setters and regulators
(e.g., the PCAOB and the SEC). We
provide various technology-based
tools to support our auditors in
maintaining their independence,
including systems and processes to:
• identify the entities requiring
independence (including,
for example, the affiliates,
subsidiaries, and related-entities
of audit clients to which the
independence rules also apply);
• document the permissibility of
proposed non-audit services;
• facilitate the assessment and
monitoring of joint business
relationships;
• initiate independence consultations
with in-house experts;
• evaluate, pre-approve, and monitor
personal investments by partners
and managers (as well as their
spouses, spouse equivalents, and
others to whom the independence
rules also apply). We created a
web-based tool that provides the
ability to “pre-check” a security
before acquisition as well as the
option to provide direct, automatic
feeds from an individual’s
account at many of the major
brokerage firms into the Firm’s
independence system; and
• document our professionals’
annual confirmation of compliance
with these independence policies
and other compliance topics.
A team of dedicated professionals
(approximately 15 partners and 200
staff) help our audit professionals
achieve and maintain independence.
This team maintains and updates
our independence policies and
guidance, develops our annual
independence training, develops and
administers our compliance systems
and procedures, and serves as a
resource for our people facing realtime situations. In FY15, this team
engaged in approximately 19,000
independence-related consultations.
Personal independence matters are
generally either self-identified or
identified through the Firm’s audits of
individuals’ personal independence
compliance. If such a matter arises,
we address and resolve it promptly,
including, where appropriate,
discussing the matter with the audit
committee for the company to which
the independence requirements apply.
PwC has established protocols and
processes that we follow for any
acquisition the Firm makes. Included
as a component of these processes
are steps related to independence,
including the review of client
contracts for scope of services, joint
business relationships, procurement,
and personal and Firm independence.
Partner rotation
SEC and PCAOB requirements provide
that both the lead audit partner
and Quality Review Partner on a
public company rotate off the audit
engagement every five years. We also
have rotation policies for auxiliary
partners and partners on non-public
company audit engagements. We
believe that periodically rotating
the partners who work on our
audits provides a balance between
bringing “fresh eyes” to the audit and
maintaining a deep understanding
of the client and its operations,
including through continuity of others
on the team, driving both enhanced
objectivity and audit quality.
Our systems and processes enable
our practice leaders to manage
partner rotations, helping to
timely identify and transition
responsibilities to a successor partner
who has the skills necessary to
maintain consistent audit quality.
Considerations in
undertaking
an audit engagement
Although we seek to grow our
Assurance practice, we remain
judicious in accepting new audit
engagements and renewing existing
ones. Our procedures for assessing
whether to accept a new audit client,
or continue to serve an existing client,
are designed to identify potential
areas of risk and focus on a number
of matters, including whether:
• the entity’s management, board,
significant shareholders, and
principal owners are people of
integrity and good repute;
• the engagement is allowable
under professional and
regulatory standards and
is within our professional
competence and capabilities;
• there are any unresolved issues
involving independence, conflicts
of interest, or relationships
with other entities; and
• there are any unreasonable
timing or resource constraints
that would affect our ability to
comply with applicable standards.
Key to making our decision to accept
or continue an audit engagement
is whether we have the resources
with the right skills, experience,
industry knowledge, and capacity to
perform a high-quality audit. We only
accept audit engagements for which
we believe our audit procedures
can satisfactorily address the risk
of material financial statement
misstatement, whether due to error
or fraud, and that align with our
strategies for growing our practice.
• the entity’s operations are
governed by acceptable
standards of behavior;
PwC
5
Multi-disciplinary firm
Building trust is at the core of our
Purpose. Credibility and reputation
are important components that
enable us to build that trust. If we
fail to maintain trust, we could suffer
irreparable harm to our brand and
lose our ability to deliver on our
Purpose. That is why maintaining
the quality and integrity of our audit
practice is foundational to our brand,
our strategy, and our success.
6
Our focus on audit quality
We believe that a multi-disciplinary
firm (that is in full compliance with
independence requirements) makes
us more knowledgeable of the risks
and challenges that affect our audit
clients. These risks and challenges can
include, among many others, different
revenue models based on emerging
technology and business models;
the impact of cybersecurity threats
on internal control over financial
reporting; valuation processes due
to the expanded use of fair value
in financial reporting; forensic
investigations; complex income tax
matters; and information technology
innovations. These are complex issues
that require deep understanding and
technical knowledge. Continuing to
invest in our non-audit practices—
in the people as well as the
expertise they offer—helps keep us
at the forefront of these issues.
A multi-disciplinary firm also helps
us attract and retain top talent,
allowing us to leverage our nonaudit personnel to execute our
transformation and innovation
agenda in order to sustain and build
on our quality improvements. For
example, continued development of
data auditing technology and tools
requires specialized skill sets. Also,
our specialists are often leveraged
as part of the audit. For example,
valuation specialists, who build
competencies performing valuations
for non-audit clients, assist audit
teams in performing auditing
procedures over valuations for audit
clients. Similarly, our tax specialists,
who build competencies advising on
tax provisions for non-audit clients,
assist audit teams in performing audit
procedures with respect to them.
We are, however, also focused on
the potential risks to our audit
practice presented by our multidisciplinary strategy. In that regard,
we remain mindful of the importance
of maintaining the following:
• A strong leadership tone
focused on:
-- Audit quality, independence,
and objectivity
-- Taking a leadership position
on profession-wide matters,
including transparency regarding
non-audit services to help
address stakeholder concerns
• Effective independence and
other monitoring processes
• Strong governance protocols
over the allocation of investment
spending to our different businesses
The general growth of our non-audit
businesses is not driven by a goal of
leveraging our audit clients. We only
perform non-audit services for audit
clients when (1) it is permitted by
applicable professional standards
and independence rules, and
(2) the audit committee agrees—
before any services are provided—
that such services will not impair
our independence. Today’s audit
committees are very careful about
approving non-audit services; they
share our focus on the importance
of maintaining independence.
PwC
7
Our people
Human capital
strategies
We have been recognized by a
number of different organizations
for our accomplishments in human
capital, and are committed to creating
an environment where we are able
to attract, develop, and retain the
best and brightest in our profession.
We see this as critical to our success
as a Firm. Our people strategies—
including how we recruit and deploy
talent, develop skills and identify
diverse professional experiences, and
provide coaching and feedback—
are all essential to our ability to
achieve our quality objectives.
We were named the world’s
second most attractive employer
to millennials (after Google)
in Universum’s World’s Most
Attractive Employer annual
rankings for 2015.
The PwC Professional
As we look to evolve, and remain as
the leading professional services firm,
we must create the PwC professional
of the future. This individual
possesses both business and global
acumen, embodies exceptional
technical capabilities, exhibits
leadership skills, and demonstrates
expertise in cultivating professional
relationships. As part of our business
transformation strategy, our
objective is to create a well-rounded
professional, a whole leader, who
embodies all of these qualities and can
confidently deliver quality, value, and
excellence in increasingly complex
and rapidly evolving environments.
During this past fiscal year, we
launched the PwC Professional, a
global career progression framework.
The PwC Professional illustrates how
we are developing our people into
leaders who possess the capabilities
and confidence to deliver the PwC
Experience, execute our strategy,
support our brand, produce high
quality work, and help us grow
our Firm. The PwC Professional
framework guides our approach for
developing leadership capabilities
at every level and is complemented
by learning solutions relevant to
each leadership dimension. The
PwC Professional framework
allows us to differentiate our
Firm now and in the future.
Recruiting
Developing the PwC Professional
starts with sourcing the best
talent. While our Firm continues to
transform, our value proposition
for attracting top talent remains
consistent. We expect a lot from our
people, but in return we provide
competitive compensation and
outstanding employee benefits,
including our recently announced
student loan paydown benefit,
which will be effective next
year. We provide world-class
development opportunities and
the chance to work with some of
the world’s premier organizations.
Our sourcing strategy is designed
to hire highly qualified candidates
who have diverse backgrounds,
skills, and cultures; possess personal
attributes consistent with our Firm’s
culture and the PwC Professional;
have a questioning mindset
and intellectual curiosity; and
demonstrate courage and integrity.
PwC will pay $1,200 per year for up to six years to help eligible
recent graduates pay back their college loans
8
Our focus on audit quality
Our reputation depends on hiring
the most talented professionals
available and, in turn, our reputation
for quality enables us to attract
the best candidates. Our stringent
hiring standards for entry-level
and experienced professionals,
which include assessing academic
records and conducting background
and reference checks, assure that
our newly hired professionals
are well suited to meet the Firm’s
quality expectations. In FY15, our
Assurance practice hired nearly
2,900 new graduates and 2,800
interns, representing an increase
of approximately 20% at the entry
level. We also hired more than 1,300
experienced professionals, continuing
a second straight year of record hiring
at the experienced level. In addition,
we are continuing to seek out
candidates with science, technology,
engineering, and mathematics
(STEM) capabilities, as we view
these as important skills for the
future. In FY15, 11% of our campus
hires possessed a STEM degree.
“Today, we recognize
skills in data analytics,
information management, and
programming languages as
more valuable than ever, along
with the leadership skills that
enable students to effectively
lead, communicate, and
collaborate. Tomorrow, we can
only imagine how technology
will continue to transform our
work and the workplace.”2
Number of audit professionals by level
(as of each fiscal year end)
FY15FY14 FY13
Partners
897909 880
Managers/Sr. Mgrs/Directors
3,0162,905 2,789
Senior Associates
2,6792,305 2,218
Associates
5,3875,147 5,170
Total
11,97911,266 11,057
As part of our talent strategy, we are
developing a workforce suited to meet
the needs of our changing business.
PwC’s Flexible Talent Network (FTN)
allows us to access designated PwC
employees who work with us a few
months of the year, allowing us to
source our own network of qualified
talent during workload peaks. This
unique arrangement provides us
with access to qualified employees
who may otherwise completely
leave the workforce (e.g., because of
family responsibilities). In FY15, we
utilized more than 200 individuals
as part of our FTN. Feedback has
been positive on both performance
of the FTN members and the way
these employees further enhance our
ability to deliver a quality audit.
As a result of these actions, we
ended FY15 with over 6% more audit
professionals than the prior year.
In 2015, we expanded the
campuses we recruit from to
an additional 20 schools that
have a significant population of
Hispanic/Latino and/or Black
or African-American students.
Professional development
Opportunities for learning and
development—whether team-based,
in a classroom environment, or
technology-based—help our people
develop the skills to be a successful
PwC Professional. Throughout their
tenure with the Firm, we provide
our professionals with increasingly
challenging experiences and
career opportunities. Professional
development also occurs through the
coaching and real-time development
our professionals receive on the job.
2 Source: PwC’s publication—Data driven: What students need to succeed in a rapidly changing business world https://www.pwc.com/us/en/faculty-resource/assets/pwcdata-driven-paper-feb2015.pdf
PwC
9
Becoming a CPA is an important part
of our audit professionals’ career
progression, as it demonstrates
a mastery of core auditing and
accounting knowledge. Passing the
CPA exam—a significant step toward
obtaining the CPA credential—is
a prerequisite for advancement to
the audit senior associate level.
In 2015, 12 of the 60
individuals recognized by
the AICPA for achieving
exceptional results on the
CPA exam were from PwC.
Our partners also help the members
of their teams—and each other—
define career aspirations and then
identify development opportunities
that will enable them to reach their
goals. Opportunities for learning
may include tours with various
practices within the Firm or in
different offices around the world.
Retention
Retention is important in achieving
sustained audit quality. We are
dedicated to creating an environment
that enables us to deliver the PwC
Experience to our people. From
embracing our commitment to
working flexibly to taking the time
to engage and inspire our people
on a personal level, we “re-recruit”
our people by delivering on the
value proposition that a career
with PwC provides. We recognize
that turnover rates in the public
accounting profession are high,
10
Our focus on audit quality
Average annual voluntary turnover rate by staff level FY15FY14 FY13
Managers/Sr. Mgrs/
Directors/MD’s
12.1%12.7% 13.5%
Senior Associates
20.7%26.0% 23.1%
Associates
15.9%18.4% 15.8%
Total
16.2%18.8% 17.0%
and that our staff, in particular,
are in high demand. Accordingly,
retaining our highly talented
professionals remains a priority.
Providing our people with flexibility
in meeting both their professional
and personal obligations is an
important component of our retention
strategy. In addition to continuing
to provide formal flexibility options
(such as reduced schedules and
telecommuting arrangements),
we are making flexibility
discussions part of our culture.
For example, we encourage teams
to develop “flexibility plans” at the
onset of an engagement and identify
“flexibility champions” within
each team to keep them on track,
particularly during peak periods.
This energizes our engagement
teams’ passion for and commitment
to delivering quality, creates a more
rewarding experience, and increases
their desire to remain with the Firm
longer. Reducing our professionals’
hours worked in excess of 40 hours
per week has been a PwC goal for the
past few years; our success in this
effort is reflected by the reduction in
average annual hours at all levels.
“Flexibility is about having predictability in our work. That
means we need to work together to plan, coordinate schedules and
deliverables, and give each other the ability to take the personal
time we need to pursue all of our goals.”
– Tim Ryan, Markets, Strategy and Stakeholders Leader
Average annual hours worked in excess of 40 hours per week
(2,088 annually)
FY15 FY14FY133
Partner
461475 495
Senior Manager/Manager
345378 401
Senior Associate
305347 356
Associate
268311 312
Staff engagement and retention
are influenced by our culture of
connectivity and recognition. To help
our people reach their full potential,
each staff member is assigned a
“relationship partner.” Having a
relationship partner is a powerful
way for staff across all staff levels to
connect one-on-one with a senior
member of the Firm. The relationship
partner is a resource from whom the
staff member can seek career advice,
discuss challenges, and learn more
about the partner’s role within the
Firm. In FY15, we also rolled out a
new program, weCARE, to empower
and enable all partners and staff to
show appreciation and recognize
individuals for their contributions
and impact. Further, we encourage
our staff to participate in our
corporate responsibility efforts,
such as Earn Your Future, pro-bono
work for non-profit organizations,
volunteering, or giving. These efforts
positively impact local communities
and also have a positive impact on
the retention of our staff, who are
purpose driven. For example, we
have found that our core assurance
staff who participate in corporate
responsibility-related activities have a
turnover rate approximately 8% lower
than those who don’t participate.
We are seeing the positive impact
of these combined efforts with our
staff engagement scores, which
are correlated with our decreased
turnover. The combination of higher
engagement and lower turnover
and overtime hours contributes
positively to our quality objectives.
Global people survey
Engagement Index4
(Assurance):
FY15
83%
FY14
78%
FY13
77%
Our diversity and
inclusion strategy
Our stakeholders look to us for broad
thinking and perspectives, which
leads to greater value in the services
we provide, innovative solutions
to client challenges, and enhanced
quality. To realize these objectives,
we need people of different cultures,
backgrounds, and experiences—as
well as an inclusive environment in
which all of our people can succeed.
Cultural dexterity helps us connect,
communicate, and work with people
from different backgrounds. An
inclusive environment is shaped
through countless experiences
and interactions with individuals
throughout our organization. Our
diversity and inclusion strategy
engages all of our people to
help continue the course toward
organizational change.
An integrated approach
PwC has been on a journey to
promote diversity and sustain an
inclusive environment for all of
our people. We’re proud of the
progress we have made to date,
but there is still more we want to
do to enhance our inclusive culture
and to attract talented people who
have unique skills, experiences, and
ambitions. Today, women compose
45% of our Firm, and diverse
professionals (including racial/ethnic
minorities and LGBTQ individuals)
make up 30% of our Firm.
3 Note that in our 2013 Quality Report, we used 2,080 hours as the benchmark for calculating these average extra hours. This difference reflects a difference in the number
of working days in each of these years.
4 The Engagement Index comprises four questions included in our annual Global People Survey. The questions measure the pride, advocacy, commitment and overall
satisfaction of our people. It represents the extent to which our people are motivated to contribute to business success and are willing to apply discretionary effort to achieving
business goals.
PwC
11
Diversity and inclusion is a Firm
imperative. To better align our
programs and initiatives with our
people and business strategies, our
diversity priorities are incorporated
into our organization at many levels.
For example, our partners’ annual
plans include expectations tied
to the identification of leadership
and development opportunities
for our women and multicultural professionals. Leadership
development programs help
leaders, managers, and staff build
cultural dexterity in their teams.
And our PwC Professional career
progression framework builds in
global acumen as a key attribute
to demonstrate the importance of
having a mindset that transcends
geographic and cultural boundaries.
Each of our professionals has personal
accountability to sustain an inclusive
workplace. Our holistic approach
stresses the importance of creating a
supportive and engaging environment
in which our diverse professionals can
thrive. We focus on three main areas:
• Early success: We plant the seeds
for our diverse talent pipeline
through programs such as our
Start internship, which prepares
high-achieving, diverse college
students in their freshman,
sophomore, and junior years for
success through learning and
development opportunities and
shadowing experiences. Once
hired, we help them get a strong
start through programs like
Vanguard–a year-long program
designed to support the success of
Black/African-American new hires.
• Leadership development:
We continue to support our
professionals throughout their
career at PwC by offering programs
such as Diamond, which provides
coaching and sponsorship
to top-performing minority
senior managers and directors,
and leadership development
programs like Accelerate,
for Asian/Pacific Islander
experienced associates, and Select
Senior, for higher-performing
diverse senior associates.
• Inclusion: We offer all our people
opportunities to raise their diversity
awareness and increase their
cultural dexterity. This includes
initiatives such as PwC’s White
Men as Diversity Champions,
which educates and engages our
For PwC, our diversity and inclusion strategy is a journey—we recognize there is more we need to do, but we are
proud of the progress we’ve made to date. Key milestones include:
1990:
2001:
2004:
Appointed the first woman
Office Managing Partner,
the first woman partner to
the Partner Admissions
Committee, and the first
minority woman to the
partnership
First women elected
to PwC’s Board
of Partners and
Principals
Convened PwC’s
LGBT Partner
Advisory Board
12
1996:
2002:
2006:
Added the first woman
to both the US and
Global leadership
teams
Appointed PwC’s first
Chief Diversity Officer
Launched
Diamond—
a program for topperforming Black/
African-American,
Hispanic/Latino
and Asian senior
managers and
directors
Our focus on audit quality
white males in recognition of the
important role they play in creating
an inclusive workplace, and a
“Blindspots: The Hidden Biases of
Good People” training, which helps
partners and managing directors
gain awareness of potential
implicit associations and their
consequences. We also engage our
people in diversity circles for Black/
African-Americans, Asians/Pacific
Islanders, and Latinos/Hispanics,
as well as women, working parents,
veterans, LGBTQ professionals, and
individuals who have a disability
or care for someone who does.
As a result of our efforts to promote
diversity and sustain an inclusive
environment, the diversity in our
new partner class across our Lines of
Service firmwide has risen from about
17% women and 18% minorities
in 2009 to more than 30% women
and 21% minorities in 2015. During
the same time, our partnership
overall has gone from 17% women
and 7% minorities to 19% women
and 12% minorities in 2015.
Accelerating change
In FY15, we launched a new Diversity
Distinctive Experience (DDE)
framework to help us accelerate
progress on the Firm’s diversity goals
and develop our future Firm leaders.
This framework requires that all
partners demonstrate a DDE in order
to assume a new leadership role (i.e.,
cross-Line of Service industry leader
or Market Managing Partner) and
become a member of our Extended
Leadership Team. Examples of DDE
include sponsoring a diverse staff
member who is admitted into the
partnership, completing a global
assignment, working in 2-3 regions
or offices over an extended period
of time in the US, or using one’s
role as a Primary Reporting Partner
or coach to help a diverse partner
or staff member be successful.
In the short term, the DDE framework
will help increase the cultural
dexterity of our leaders. Being
exposed to different experiences
and people can change the way
our professionals view the world
and open their mind to new ways
of thinking. In the longer term, we
expect DDE will help increase the
diversity of the Firm’s leadership
by incentivizing today’s leaders to
invest the time and energy needed
to retain and promote talented
diverse professionals for our future.
2007:
2010:
2013:
2015:
Won the Catalyst Award,
which recognizes
“innovative organizational
initiatives that address
the recruitment,
development, and
advancement of all
women”
Launched PwC’s
Veterans Network
Hosted live “PwC
Talks: Leaning
In, Together”
webcast with Sheryl
Sandberg, author of
“Lean In” and COO
of Facebook
PwC becomes an
IMPACT 10X10X10
champion for
HeForShe, the UN
Women’s global
gender equity
initiative
2009:
2011:
2014:
2015:
Launched
Vanguard—
a year-long
program designed
to support the
success of Black/
African American
new hires
Launched
Breakthrough
Leadership, a
development
program for topperforming women
senior managers and
directors
Established
a Disability
Strategy
Council to
enhance
the PwC
Experience for
people with
disabilities
Hosted live “PwC
Talks: Being color
brave” webcast on
the topic of race with
Mellody Hobson,
President of Ariel
Investments
Please visit www.pwc.com/diversity to learn more about PwC’s Diversity & Inclusion strategy,
as well as awards and recognition we have received for our achievements in this area.
PwC
13
“Don’t just network and build relationships with people who look like you, think
like you, and approach the world like you do. The business community is extremely
diverse, and our Firm gives us great opportunities to broaden our horizons. Always
keep in mind that people come to the table with different thoughts, backgrounds,
sensitivities, and emotions. Embrace those differences, and learn from them. Then,
when you’re faced with a unique challenge in life or at work, you can draw on your
diverse network to help you navigate it—and succeed.”
—Vin Colman, US Assurance Leader
Learning and
development
Auditing is a complex and
challenging profession. However,
the composition of our audit
teams provides our less tenured
professionals the opportunity to
work with more senior professionals,
which promotes meaningful onthe-job training. Judgment is honed
by witnessing—on a real-time
basis—how seasoned auditors
approach issue identification and
resolution. Professional skepticism,
accounting knowledge, auditing
skills, issues management, and
review and supervision, are technical
capabilities every audit professional
is required to develop continuously
throughout his/her career.
We believe our staffing ratios
provide opportunities for our
less experienced staff to learn
from seasoned professionals.
14
Our focus on audit quality
Leverage ratio of audit-related hours for audit team members:
FY15FY14 FY13
Partner to manager
1 to 3.9
1 to 3.7
1 to 3.6
Manager to staff
1 to 4.1
1 to 4.1
1 to 4.2
1 to 20.2
1 to 19.2
1 to 18.7
Partner to staff
The experience needed to develop
the technical and business acumen
required to become an effective
auditor hasn’t changed, but it has
required the development of new
skills. For example, as part of our
audit transformation and to continue
to enhance audit effectiveness, we
are training our professionals to
use tools to interpret large amounts
of data. And to maintain their
focus on the areas requiring the
most skill and judgment, we are
shifting routine or non-complex
work to resources outside of the
traditional engagement team.
The significant amount of learning
that occurs through on-the-job
review, supervision, and mentoring is
supplemented through participation
in rigorous, Firm-developed learning
programs. These progressive
programs include a primary focus
on auditing and accounting skills,
as well as business and industry
developments, and are tailored to the
experience level of our professionals.
With feedback obtained through our
monitoring efforts—whether through
our own internal inspections process
or through analysis of observations
from the PCAOB and peer reviews—
we continually update and redesign
our training curriculum. We also
incorporate observations from our
Chief Auditor Network, as well as
results of surveys, focus groups, and
post-course learning assessments
when updating our courses.
The effectiveness of our formal
learning is enhanced by our
national Assurance learning team,
which comprises experienced
PwC audit professionals who are
dedicated to instructing staff in
the first six years of their career,
and our Chief Auditors, who play
an important role in instructing
our partners and managers.
The development of our Assurance
training courses is led by audit
partners with the support of a team of
35 experienced audit and education
professionals. The combined
auditing and accounting knowledge
of this team, along with the course
design and delivery expertise of
our education professionals, drives
the creation of effective training
courses for our Assurance practice.
We require our audit professionals—
from first-year staff to partners—to
attend training courses that integrate
accounting and auditing concepts for
a more effective learning experience.
Our managers and partners also
attend industry-specific training
where they choose courses most
relevant to their current roles and
responsibilities. In addition, we offer
our professionals non-technical
training around topics such as project
management, issues management,
and professional communications.
Required attendance at training
courses is an important component
of an individual’s performance
assessment, and is monitored by
the Assurance partners who lead
our market teams. In addition, all
required training courses are followed
by required learning assessments that
help extend the learning experience
by testing knowledge gained during
the course. The results of these
tests also provide participants
with a better understanding of
where they can focus additional
attention in technical areas.
Number of hours of auditing and accounting training required
annually for each professional level:
FY15FY14 FY13
Partners
32 to 38
24 to 32
25 to 33
Managing
Directors-Managers
34 to 45
24 to 29
26 to 27
42
40
44 to 48
40 to 80
40 to 80
42 to 85
Senior Associates
Associates
PwC
15
Our approach
Audit methodology
and processes
In the interest of continuous
improvement, over the
past year we have:
• launched the first component
of our suite of data auditing
tools, Halo for Journals; and
Our audit methodology is
instrumental to audit quality and is
one of the key elements of delivering
the PwC Experience. By continuing to
standardize, simplify, and automate
the audit process through innovation,
we are driving consistency in
the execution of our procedures,
promoting adherence to professional
auditing standards, and leveraging
knowledge and experiences
across engagement teams.
• introduced the latest version of our
global audit software, Aura v6 (see
page 22 for further discussion);
• continued to leveraged our Service
Delivery Centers to drive quality
and consistency, and to leverage
additional resource pools (see
page 17 for further discussion).
Foundational to our methodology
is the assessment of risk. The
identification and evaluation of
risk begins in the planning phase
of the audit, and it continues
through issuance of the audit
report. Our first step is to gain an
understanding of the client’s end
to end business processes, which
allows us to identify and evaluate
the risks within the processes and
develop audit programs appropriately
responsive to the client’s specific
facts and circumstances.
16
Our focus on audit quality
• introduced Engagement
Performance & Quality (EPQ), our
process improvement framework
(see page 20 for further discussion);
• reinforced the importance of timely
planning and phasing of audit work
by setting deadlines for completion
of audit planning, which facilitates
the more timely consideration of
audit risk and the related response;
• developed additional industry
specific audit programs to improve
the focus and consistency of how
we address industry specific risks;
• enhanced our learning and
development programs by
updating our training in the
US for new associates through
partners, redesigning our global
curriculum for integrated
audits, and establishing a
dedicated, national network
of instructors, supplemented
by other Firm professionals;
In addition to these efforts, we
continue to enhance our methodology
and training programs to respond
to new accounting and auditing
standards and the results of internal
and external inspections, including
the related analysis of quality drivers.
For example, over the past year we
amended our methodology and
developed training related to the
issuance of PCAOB Auditing Standard
No. 18, Related Parties, and further
increased our focus and training
on auditing complex estimates—
particularly those including
estimates of future cash flows.
Audit committee
communications
Audit committee oversight
of auditors, including timely,
meaningful, and direct exchanges
of information, is another key
element of sustaining and improving
audit quality. Both we, as auditors,
and the audit committee benefit
from these exchanges. We learn
valuable information regarding
the audit committee’s points of
view and perspectives and fulfill
our professional responsibilities to
communicate certain important
items to the audit committee.
The audit committee benefits
because our open communications
enable them to more effectively
execute their oversight role.
For public companies audits, our
communications occur at least
quarterly. These discussions
may include obtaining the audit
committee’s views on financial
reporting risks and areas that
warrant audit attention, discussing
the resources to be allocated to the
audit, and considering whether the
audit fee fairly reflects the audit
work to be performed. Required
communications include discussions
about our independence, our roles,
and the roles of management and
the audit committee. In addition,
the audit committee approves our
appointment as auditors and related
audit fee and, when applicable,
non-audit services and related fees.
We are committed to discussing with
the audit committee the results of
any PCAOB inspection of our audit
engagement for the company, as
well as trends from other inspections
that may have a bearing on future
audits. Further, in response to the
PCAOB and the Center for Audit
Quality (CAQ) initiatives on audit
quality indicators, during FY15 we
continued a voluntary pilot program
to discuss potential engagementspecific metrics with certain audit
committees in order to obtain
feedback on the overall usefulness
of this information in fulfilling their
audit oversight responsibilities. This
feedback, along with input received
from other stakeholders, provided
valuable insights that informed our
views as articulated in our response
letter to the PCAOB’s recent concept
release on audit quality indicators.
Resource management
We continue to invest in ways to
phase our work to alleviate peak
busy periods for our people. Our
increase in headcount is a major
component of this effort. We support
this by advancing key elements of our
transformation agenda. Extending
our EPQ program has enabled
more of our teams to realize greater
process efficiencies. We increased
our leverage of Service Delivery
Centers (SDC’s), as described
below, and continued to accelerate
audit planning efforts. From a
technology standpoint (as further
discussed starting on page 22),
we extended the use of Connect to
automate the client documentation
request process, began piloting
data auditing techniques, and
initiated phase one of our Aura v6
implementation. Combined, these
efforts have helped us reduce full-year
utilization by just over 3 percentage
points and utilization for our peak
period of January and February by
4 percentage points. We believe this
reduction in utilization is one of the
factors that contributed significantly
to a decline in voluntary turnover.
Use of our SDC’s continues to be a
critical element of our Assurance
people strategy. Standardized,
repeatable, non-client facing activities
performed by SDC personnel increase
quality and consistency and enhance
the learning and overall experience
for our people by creating capacity
within our engagement teams to
focus on the more challenging and
judgmental aspects of the audit. This
approach contributes to increased
job satisfaction and morale, resulting
in higher retention and leading to
enhanced quality. In FY15, hours
incurred at the SDC’s increased
nearly 20% over the prior year and
represented 6% of all audit hours.
Consultation process
and use of specialists
All levels of Firm leadership, along
with all partners involved in the
audit process, play important roles
in achieving audit quality and are
accountable for their performance.
No audit team, partner, or staff
member is ever expected to “go it
alone.” To the contrary, as part of
our collaborative culture, the audit
partner is expected to leverage the full
quality support network of the Firm
when complex accounting, auditing,
or financial reporting matters arise.
This network includes our National
Office, Chief Auditor Network, Risk
Management Partners, and partners
who lead the audit practices in
our market and industry groups.
PwC
17
Ratio of partners serving in
technical support roles to the
total number of audit partners
FY15
1 to 7.6
FY14 1
to 7.5
FY13 1
to 6.5
In addition to dedicated, experienced
partners and professionals in
technical support roles, our
engagement teams can also draw
upon Firm specialists in a variety
of accounting and auditing areas.
Complex accounting matters may
include, but are not limited to,
revenue recognition; financial
instruments; tax reporting and
accounting; fair value determination
and reporting, including in the
context of business combinations;
and information technology.
Complex auditing matters may
include multi-location scoping,
auditing estimates and fair values,
and various internal control related
matters. The nature and extent
of these matters in the context
of a company’s specific financial
reporting will drive the number of
specialists’ hours for a given audit.
Consultation and collaboration
with specialists in complex, highly
technical, or specialized areas are
key aspects of ensuring quality
in our audit. Such discussions
help us make the best judgments
and support the alignment of
our views within the Firm.
Partners and professionals who
provide consultation support also
assist audit teams in reviewing
the assessments performed by
management and audit committees
when potential errors are identified
in previously issued financial
statements. While relatively rare,
such assessments may result in
a conclusion by the company to
restate those financial statements.
Number of annual restatements
as a percentage of issuer audit
clients5
FY15 1.16%
(21 out of 1,805)
FY14 1.20%
(22 out of 1,839)
FY13 1.15%
(21 out of 1,825)
Percentage of total audit
engagement hours provided
by specialists
FY15
11.7%
FY14 11.2%
FY13 10.0%
5 For purposes of this report, issuer audit clients comprise SEC registrants and mutual funds.
18
Our focus on audit quality
National Office
Our National Office embodies PwC’s
strong culture of collaboration.
Accounting, auditing, and SEC
technical professionals regularly
advise audit teams on significant,
unusual, and complex matters.
The National Office plays a vital
role in keeping our Firm policies
and guidance, including our
audit methodology, current and
communicating them to audit teams.
Through consultations, presentations,
direct client interactions, and
distribution of various thought
leadership publications, the National
Office keeps our audit teams, clients,
and other stakeholders informed of
matters that may impact the audit,
audit quality, or financial reporting,
including standard-setting activity
and other relevant regulatory matters.
Our audit policies identify specific
matters for which National Office
consultation is required. Audit teams
are also encouraged to consult on
any matter as warranted by facts
and circumstances. In the event an
audit partner initially has a different
viewpoint than our National Office, a
resolution process provides guidance
for elevating the discussion until the
matter is satisfactorily agreed upon.
Risk Management
Our Risk Management network
includes experienced audit partners
who serve in national, regional,
and local roles. Generally, our Risk
Management partners have more
than 20 years of experience. National
Risk Management professionals
are generally dedicated on a full-
time basis and are responsible
for the design, development,
and execution of the Firm’s risk
management policies. Regional
and local risk management
partners devote a portion of
their time to risk management
activities, while continuing to
manage their own engagements.
Risk Management partners support
audit teams in assessing risks
(such as whether to undertake or
continue an audit engagement)
and audit execution matters and
applying the Firm’s risk management
policies. Audit teams are required
to consult with a Risk Management
partner on specific issues (such as
error evaluation and resolution,
principal auditor considerations,
and going concern matters), and
are encouraged to do so whenever
they could benefit from Risk
Management partner insights.
Chief Auditor Network
Our Chief Auditor Network provides
direct and immediate support to
our audit teams in the field. With a
strong connection to our auditing
experts within our National Office
and with each other, the partners
and professionals that are a part of
our Chief Auditor Network help our
audit teams identify where specific
additional audit attention might
be warranted, design effective and
efficient audit procedures, and
exercise professional skepticism.
Using their deep understanding of
auditing standards, Firm policy,
and audit methodology, our Chief
Auditors may also provide auditing
advice by reviewing certain aspects
of an audit engagement before the
audit is completed. Through these
activities, the Chief Auditor Network
is able to provide local and national
leaders with insights on overall
audit quality trends and progress.
To further leverage their expertise,
the professionals in our Chief Auditor
Network participate in market and
industry group meetings to share
insights gained through their work
with engagement teams, as well
as information about frequently
asked questions and areas that
merit additional focus. Using their
acquired knowledge of the current
issues facing our audit teams, they
also contribute to the development
of course content for our required
audit training and serve as
instructors for many of the courses.
PwC
19
Quality Review Partner
Engagement quality review represents
a critical component of our quality
control system, and partners
serving in these roles must have
the requisite technical knowledge,
experience, and time to perform
the role effectively. Quality Review
Partners (QRPs) are involved in the
most important aspects of the audit,
including reviewing the audit plan,
considering the Firm’s independence,
and discussing the significant
risks identified by the audit team
and the responses to those risks.
QRPs are also involved in specific
accounting, auditing, and financial
reporting and disclosure matters.
QRPs are accountable for their
performance, and when quality
expectations are not met, their
compensation may be impacted
(please see our Accountability
discussion on page 3). As with
lead engagement partners, QRPs
must also rotate off of their SEC
audit clients every five years.
Beginning with our calendar 2014
year-end audit cycle, we issued
expanded guidance to clarify and
enhance QRP’s understanding
of their responsibilities. We also
created the role of QRP assistants,
and developed policies and guidance
regarding their use. QRP assistants
are generally partners with one to
five years of experience as a partner
who bring greater capacity to the
execution of engagement quality
reviews. At the same time, serving
in this role provides important
experience to our less-tenured
partners that can be leveraged in
future years when they lead the
execution of engagement quality
20
Our focus on audit quality
reviews. In addition, we adopted
new training requirements for both
QRPs and QRP assistants. We are
confident that these enhancements
will improve the effectiveness of our
current QRPs, as well as strengthen
our pipeline of future QRPs.
Engagement
Performance & Quality
EPQ is PwC’s branded approach to
process improvement. For years,
world class companies have used
process improvement to enhance
the quality and efficiency of their
products and services. We recognize
that conducting an audit is also a
process, with numerous supporting
sub-processes. Orchestrating the
execution of those processes over
the course of the audit can be
very complex, and includes the
coordination of various inputs,
stakeholders, outputs, and
requirements. By examining and
improving the audits sub-processes,
we can improve the overall execution
of the audit, improving quality as
well as efficiency. Additionally,
a better executed audit results in
a better experience for our audit
teams, as well as our clients.
Process improvement does not
necessarily change what audit
procedures are performed, but it
often does impact how we go about
conducting those procedures. By
making modest changes to the
sequence and timing of activities,
or increasing the level of precision
at which we plan, and adding more
rigor to project management, we are
able to have a meaningful positive
impact on the audit process.
A core principle of EPQ is building
quality at the source—that is,
preparing and planning to do the
work to get it right the first time,
thereby reducing the extent of
errors or rework required as the
audit process progresses. This not
only improves overall quality, it
improves efficiency and reduces the
compression of work toward the end
of the audit, allowing more time to
focus on key judgments and items
of significant risk. We are focused
on doing the right work, at the right
time, and avoiding unnecessary work.
EPQ is based on a team-enabled
approach to process improvement.
This means that all levels of our
professionals learn to apply a practical
framework for process improvement
so that they can better evaluate and
improve audit processes. Teamenabled solutions tend to be more
effective and sustainable, while
also enhancing the team members’
engagement and sense of purpose in
their work. Studies have shown that
when team member engagement
improves, morale, quality, and
productivity also improve. We
believe that enriching the work
experience of our team members
will help position us to achieve
superior results for our clients and
differentiates us in the market.
EPQ was rolled out to professionals
at all levels of the core Assurance
practice during 2014 and 2015. In
workshops, participants learned
the EPQ tools and techniques
through hands-on application to
real audit situations. A network
of EPQ champions, consisting of
practice partners and managers,
is embedded in the markets to
provide additional support to client
service teams in the implementation
and execution of EPQ.
Quality across
the network
Combined with our other
transformation initiatives, including
Service Delivery Centers and
technology (discussed on page 17),
data analytics, and automated testing,
EPQ is helping to revolutionize
the audit process—increasing
the overall value delivered to our
stakeholders through the audit while
reducing the level of inefficiency and
disruption, ultimately contributing
to enhanced audit quality.
High quality audits across the
network are vital to the US firm and
our brand, and are the foundation of
our Purpose. Our prior quality reports
highlighted a number of significant
efforts undertaken to enhance
quality across the network. In 2015,
the PwC Network further built on
these efforts and released a number
of global tools designed to enhance
the consistency of execution of high
quality audits. These combined
efforts included the following:
Global network
• Introduced Aura v6, the latest
version of our global audit software
(see page 22 for further discussion)
PwC is a member of
PricewaterhouseCoopers
International Limited (PwCIL),
a UK private company limited by
guarantee. Each of the more than
150 member firms of PwCIL is a
separate legal entity, and together
they form the PwC network.6 As a
member of the PwC network, we are
able to work with our fellow member
firms to serve companies across
borders and regions, including in
emerging markets around the world.
By virtue of PwC’s membership in the
network, audit teams have access to
important resources in member firms
across the world, including those
responsible for audit methodology
and processes, as well as the
performance of individual audits.
• Launched Connect, a global,
web-enabled communication
and collaboration tool (see page
22 for further discussion)
• Launched Halo for Journals, our
global data auditing application
(see page 23 for further discussion)
• Launched the PwC Professional—
a career progression framework
used for all staff globally (see
page 8 for further discussion)
In addition, we assisted member firms
in enhancing their quality-focused
infrastructure, including helping
them enhance their own processes
for identifying potential causes of
quality issues. In addition, a task
force of member firms has been
formed to share learnings and best
practices with regards to identifying
potential causes of quality issues.
Our goal in these efforts is to
facilitate the ability of other member
firms to develop consistently high
quality audit performance whether
those audits are performed within
or outside the US, for US issuer
clients or otherwise. Each member
firm is responsible for monitoring
its own quality control system,
including reviewing the quality of
its management-level controls and
the audit work it has performed.
A network team monitors member
firms’ review of their quality control
systems. When areas needing
improvement are identified in these
reviews, the member firm prepares
a remediation plan, and the network
monitors its implementation.
One of the benefits of membership
in a global network is that when a
US audit client has multi-national
operations, we can work with other
member firms that can apply their
knowledge of local laws and customs
in a way that both enhances audit
quality and is cost effective. We
continually refine how we use the
work of these non-US PwC Network
firms (including considering the
inspection results from other
member firms with whom we are
working) so that all components of
our audits meet US standards (when
applicable) and satisfy our own
quality expectations. In addition,
we recently adopted an enhanced,
global policy and related process
for sharing additional information
regarding the inspection results of
individual partners who lead the
work at non-US locations in support
of US-led group audit engagements.
6 Please see www.pwc.com/structure for further details.
PwC
21
Our technology
As a network, we are making
significant investments globally
in technology aimed at providing
our teams with the best tools to
support them throughout each phase
of the audit. New and enhanced
tools are aimed at supporting
our teams in identifying and
addressing risks and issues earlier
in the audit process, as well as
improving project management
and the phasing of our work.
At the center of our technology suite
is Aura, our global audit platform.
Aura is used by over 87,000 auditors
worldwide on every PwC audit,
driving quality and consistency on a
global basis. New tools, such as Halo
for Journals and Connect, are further
broadening our use of technology
and innovation to support our audit
teams in conducting audits with
additional insights, greater visibility
into risks, and more consistent
execution across our practice.
Aura v6
In the spring of 2015, the network
introduced Aura v6, a significantly
enhanced version of our global audit
platform. These enhancements help
our teams plan and execute audits
22
Our focus on audit quality
with greater consistency and quality.
The workflow in Aura now more
directly mirrors the natural flow of
the audit process, and enhancements
throughout the tool help our teams
better project manage the audit.
A key feature of Aura v6 is the Risk
and Response module. This new audit
plan development module assists our
teams in documenting audit risks and
building high quality, risk-responsive
audit plans. Auditors are supported
in this effort with robust industrybased risk libraries with underlying
linkages to commonly responsive
control and substantive audit tests.
The use of standard library risks and
test procedures promotes consistent,
high quality audit approaches, while
also providing teams with the ability
to tailor the plan as appropriate.
Real-time monitoring of the status of
work from online monitoring tools
helps teams continuously manage
workflow and issues. With just a
few clicks on a smartphone, tablet,
or laptop, progress is visualized,
highlighting areas where audit work
is ready for review or attention is
needed. As a result, issues can be
identified and addressed sooner in
the audit process, thereby having
a positive impact on quality.
Connect
Connect is a web-enabled
communication and collaboration
tool that has been developed to
facilitate the document exchange
process between PwC and clients (i.e.,
the “prepared by client” process) in
connection with audit engagements.
Connect is a simple and secure way
to share information efficiently and
effectively with our clients, including
via select tablets and smart phones.
Through the Connect tool, PwC
staff can create document requests,
and both PwC and our clients can
upload and download documents,
initiate action items, and create
comments. It provides PwC and our
clients with the ability to monitor
the status of requests, allowing for
better management of documentation
and greater accountability.
The use of Connect across the
network has continued to increase,
with over 18,000 Connect client
sites in use and over 172,000 total
distinct users worldwide. PwC US
continues to be the largest member
firm user, with approximately 5,000
client sites and roughly 75,000
distinct users, of which approximately
55,000 are external to PwC.
Halo/Data auditing
Through our data auditing strategy,
we are developing processes and
tools to make better use of data
analysis and automated data auditing
and validation techniques. These
data extraction and visualization
capabilities enable the auditor to
extract and analyze large volumes
of data, focus on higher risk
transactions, while enhancing quality
and providing greater insights to our
clients. Halo, our globally branded
data extraction, visualization, and
auditing platform, is designed to
enhance our risk assessment process
and facilitate automated testing
and data validation in a number of
areas. Halo for Journals, launched in
May 2015, is our first data auditing
application and helps our audit
teams analyze journal entry data to
spot unusual trends and patterns.
We will continue to pilot other
solutions under the Halo umbrella.
PwC
23
Our monitoring
Continuous
improvement cycle
One of the drivers of our enhanced
quality results, and fundamental to
sustaining and building on those
results, is our ability to timely identify
opportunities for improvement and
quickly respond. The chart below
illustrates our continuous, on-going
process. Over the last several years,
we have expanded our use of preissuance reviews and accelerated the
Execute audit
Communication/
training
In-process/pre-issuance
reviews
Internal/external
inspection
VAT
specialis
m
Continuous
improvement
cycle
Revise guidance/
develop tools
Plan audit
Communication/
training
24
Our focus on audit quality
Analysis of quality drivers
majority of our internal inspections,
allowing us to more quickly identify
trends that represent opportunities
for improvement. After performing
an analysis to identify what factors
may have contributed to inspection
comments, we develop appropriate
actions, such as expanding guidance,
developing new or enhanced
tools, or implementing additional
training. Expediting our analysis
of these factors has allowed us to
communicate updates earlier in the
audit cycle, allowing engagement
teams more time to incorporate
any changes into their audits.
In-process reviews
One of the ways we monitor
quality is by reviewing audit work
on certain audit engagements
prior to the issuance of our audit
reports. In response to learnings
from our 2014 inspection process,
in FY15 we introduced a new preissuance review program that more
specifically targeted focus areas
across an expanded number of
engagements through Estimates
Planning Workshops. In this program,
our Chief Auditor Network reviewed
the planned audit approach for one
significant accounting estimate at
over 300 audit engagements. These
reviews allowed us to focus more
specifically on relevant aspects of
our work related to management’s
more complex accounting estimates.
The Workshops centered on inperson meetings and collaborative
dialogue between the Chief Auditors
and key engagement team members
about the team’s planned audit
approach. These meetings, along
with critical review of the audit
planning documentation, provided
valuable engagement-specific
reinforcement of topics addressed in
our broader audit training programs.
Our inspections group also
annually performs targeted quality
assessments (prior to report
issuance) of both the planned audit
approach and the execution of
audit work for approximately 40-50
audit engagements. During these
reviews, the reviewers consider
various execution topics such
as application of recently issued
policies and training and audit
methodology enhancements.
In-process reviews not only inform
reviewers about the quality of the
work being performed, but also
provide insight into ways to further
improve consistent implementation
of our Firm’s methodology. These
reviews also provide individual
engagement teams with valuable
feedback that they are able to
incorporate into their audit work
prior to the completion of fieldwork
and apply more broadly to their
other audit engagements.
Internal inspections
Our internal inspections program
provides us with a valuable
assessment of how we are
executing against professional
standards, Firm policies, and our
professional obligations. During
the inspections process, reviewers
evaluate the appropriateness of
judgments made by the audit
teams and look for instances where
compliance with professional
standards or Firm policies were
not adequately evidenced in the
working papers. Engagements
are selected for inspections to
provide a reasonably representative
sample of our audit practice (e.g.,
sector/industry and size).
The inspections group has oversight
and ownership of the internal
inspections program, including
its design, administration, and
coordination. The inspections
group is made up of a core group
of experienced audit professionals
dedicated to monitoring audit
quality, driving consistency in our
inspections process, and delivering
insights into areas for improvement.
The inspections group relies on the
support of Assurance client-service
personnel with relevant industry
or technical expertise (e.g., tax,
valuation, actuarial, technology) to
execute these inspections. Reviewer
resources consist of our higher
performing staff, including nearterm partner candidates, senior
manager and director nominations
from Market Assurance Leaders, as
well as partner nominations from
Sector Assurance Leaders. In the 2015
internal inspections of 2014 audits,
890 partners and staff participated
as reviewers (34% of whom were
reviewers in the prior year).
The inspections group performs
reviews of matters identified during
inspections and communicates overall
observations and results to the audit
practice. Further, the inspections
group works with the Chief Auditor
Network, Auditing Services Methods
& Tools, Learning and Development,
and Firm leadership to determine
whether additional guidance or
training, modifications to our
audit methodology, or additional
targeted messaging from leadership
are appropriate to continuously
improve the quality of our audits.
Number of issuer audit clients
subject to internal inspections
FY15 160
FY14 179
FY13 196
PwC
25
The inspections group also evaluates
annually the Firm’s system of quality
control over our audit practice. Our
quality control system addresses:
1) leadership’s responsibility related
to their quality roles, 2) relevant
ethical requirements, 3) considerations
in undertaking an audit engagement,
4) human capital needs, 5) engagement performance, and 6) our process
for monitoring the effectiveness
of our quality control policies
and procedures. Our system of
quality control is also subject to
annual review by professionals
from the PwC global network. The
most recent annual evaluation
confirmed that our system of
quality control over our audit
practice is designed appropriately
and functioning effectively.
The results of our 2015 internal
inspections indicate we have
continued to enhance our
audit quality. The number of
matters identified is significantly
reduced compared to prior years.
Based on our 2015 internal
inspections, the following areas
warrant our continued focus:
• Complex estimates, including
future cash flows:
-- Evaluation of the reasonableness
of assumptions
-- Evaluation of whether the data
and reports used in developing
assumptions in complex estimates
are relevant and reliable (i.e.,
complete and accurate)
26
Our focus on audit quality
• Understanding the design
of controls and developing
appropriate audit procedures in
response to the identified risks:
-- Evidence of understanding
of the design of controls
-- Developing appropriate audit
procedures to address the
identified likely sources of
potential misstatements
-- Sufficiency of evidence to
corroborate the achievement
of stated control objectives
• Reliability of information used
by management or the auditor:
-- Understanding of the source
of the underlying data
used by management to
prepare information, and the
controls in place to provide
assurance regarding the
reliability (completeness and
accuracy) of information
-- Assessment of the reliability
(completeness and accuracy)
of information used in
substantive testing
As suggested by the transparency
data points and other information
included in this report, we consider a
number of quality inputs in assessing
the ongoing effectiveness of the
Firm’s system of quality control. With
respect to the results of inspections,
the Firm analyzes both internal and
external inspection results, including
the percentage of instances where
the Firm concludes that additional
audit work should have been
performed before issuing the audit
opinion. Such analyses recognize that
certain inherent differences exist in
the methods of selecting audits for
inspection. Under the Firm’s internal
inspection program, engagement
partners, in general, are selected for
inspection every three to four years.
The specific engagements inspected
for each partner are selected based
on a variety of factors, including the
number of hours managed on each
audit. In contrast, as highlighted in its
inspection reports, the PCAOB selects
audit work for inspection based on
factors that, in the inspection team’s
view, heighten the possibility that
audit deficiencies are present, rather
than through a process intended to
identify a representative sample.
Compliance rate of issuer audit
engagements selected for
internal inspection:
FY15
94%
FY14
93%
FY13
84%
External inspections
PCAOB inspections of our public
company audit practice provide a data
point on our progress in delivering
audit quality, and represent an
important check on our internal
monitoring and assessment processes.
Our regulator, the PCAOB, reviews
a relatively small percentage of our
issuer audit clients annually, using
a largely risk-based approach. This
risk-based approach is designed to
target particularly complex audit
areas, industry segments, and
clients. In accordance with the
Sarbanes-Oxley Act of 2002 (the
Act), the PCAOB’s inspection report
includes both public and nonpublic
portions. The public portion of
the inspection report contains
an overview of the inspections
procedures and observations
concerning the engagements
inspected. The nonpublic portion
of the inspection report contains
the PCAOB’s observations about a
firm’s audit performance and system
of quality control, which the Act
mandates will not be made public
by the PCAOB if a firm addresses
those quality control observations to
the PCAOB’s satisfaction within 12
months of the date of the inspection
report. The most recent inspection
report on our audit practice is dated
June 30, 2015,7 and describes the
results of the PCAOB inspection of 58
(or approximately 3%) of our 2013
year-end public company audits. The
number of audits included in Part I
has continued to decrease since 2010.
Number of PCAOB-inspected audits included in Part I
Audits inspected
Audits included in Part I
2014
5817
2013
5919
2012
5421
2011
6326
2010
7528
Part I of the PCAOB Report
Part I of our 2014 inspection report
covers inspections of selected
2013 year-end audits. In response
to that report, we continue to
focus on the following areas:
• Auditing internal control over
financial reporting and testing
those controls in a financial
statement audit, including
primarily testing the design
and operating effectiveness of
controls, including those involving
management review of financial
information or accounting analyses
• Sufficiency of evaluation and
corroboration of management’s
key assumptions, including
information that may contradict
those assumptions or related
management judgments, and
testing of key data inputs,
including those related to estimates
of future cash flows used in
impairment assessments and
business combination valuations
We believe the scope and breadth
of the comments included in Part
I of the PCAOB’s 2014 report are
narrower in comparison to those
included in the PCAOB’s 2013 report:
• Comments related to our testing
of estimates reflected a narrower
scope—primarily focused on
estimates of future cash flows
used in impairment and business
combination valuations
7 For ease of reference, we refer to this report as “our 2014 inspection report.”
PwC
27
• We achieved further improvements
in the consistency of our
execution with respect to the
requirements of AS 5, including:
-- Identification of likely sources
of potential misstatement
based on our understanding
of end-to-end processes
-- Testing of review controls
through effective implementation
of a new review controls template
-- Evaluation of control deficiencies
• We also noted improvements
in regards to:
-- The consistency of
our audit responses to
disclosure exceptions
-- Journal entry testing and
other procedures performed
in response to fraud risks
28
Our focus on audit quality
Part II of the PCAOB Report
Part II of our 2014 inspection report
is nonpublic and reflects observations
and criticisms identified during the
PCAOB’s review of certain practices,
policies, and processes related to our
system of quality control, including
observations developed from the
engagement-specific findings
reported in Part I. Areas considered
in Part II generally focus on:
• management structure
and processes, including
the tone at the top;
• practices for partner management,
including allocation of partner
resources and partner evaluation,
compensation, admission,
and disciplinary actions;
• policies and procedures for
considering and addressing
the risks involved in accepting
and retaining clients, including
the application of a firm’s
risk-rating system;
• processes related to a firm’s use
of audit work that its foreign
affiliates perform on the
foreign operations of a firm’s
US issuer audit clients; and
• processes for monitoring audit
performance, including processes
for identifying and assessing
indicators of deficiencies in audit
performance, independence
policies and procedures, and
processes for responding to
weaknesses in quality control.
As previously noted, if a firm has
addressed the quality control matters
described in Part II to the PCAOB’s
satisfaction within 12 months
after the report is issued, then no
portion of Part II is made public by
the PCAOB. During the 2015 fiscal
year, the PCAOB informed us that it
is satisfied with the actions we took
to address observations contained
in Part II of our 2012 inspection
report (which covered our 2011
year-end audits). The PCAOB has
not yet made a determination as
to the sufficiency of our actions in
response to the non-public portions
of our 2013 inspection report, for
which the 12-month remediation
period ended on June 18, 2015.
Analysis of
quality drivers
The Firm performs analyses to
identify potential factors contributing
to audit quality so that we can take
actions to continuously improve.
One of our primary objectives when
conducting such analyses is to
identify how the Firm can provide
the best possible environment for
our engagement teams to deliver a
quality audit. We look at audits both
with and without deficiencies—
whether identified through our
own internal inspections process or
through external inspections—to
help identify possible distinctions
and learning opportunities.
Specifically, a team of reviewers that
is independent from the engagement
team identifies potential factors
contributing to the quality of the
audit. We consider factors relevant
to technical knowledge, supervision
and review, professional skepticism,
engagement resources, and training,
among others. Potential causal
factors are identified by evaluating
engagement information, performing
interviews, and reviewing audit
working papers, as appropriate.
In addition, data is compiled for
audits with and without deficiencies.
This data is compared and contrasted
to identify whether certain factors
appear to correlate to audit quality.
Examples of this data include the
hours incurred on the audit, whether
key engagement team members
are in the same geography as the
client, the number of years that key
engagement team members have
been on the engagement, the number
of other audits that engagement
partners are involved in, whether the
engagement was subject to a preissuance review, and the timing of
when the audit work was performed.
Our goal is to understand how
quality audits may differ from those
with deficiencies, and to use these
learnings to continuously improve
all of our audits. We evaluate the
results of these analyses to identify
enhancements that may be useful
to implement across the practice.
We believe this analysis contributes
significantly to the continuing
effectiveness of our quality controls.
PwC
29
Stakeholder engagement
At PwC, we have the unique opportunity, and honor, to
significantly contribute to our local, national and global
communities—consistent with our Purpose and our culture.
Read more at http://www.pwc.com/corporateresponsibility.
The mission of our Center for Board
Governance is to assist directors
in more effectively executing their
oversight roles. While the Center’s
work encompasses various Board
activities, it places a major focus on
the core responsibilities of the audit
committee, as the audit committee
has the primary responsibility for the
company’s financial statements and
oversight of the external auditor.
We do this by providing directors with
in-person trainings, webcasts, and
publications that address relevant
topics to enable them to enhance their
skill sets and technical knowledge.
For example, our Audit Committee
Effectiveness Series provides
insights on topics such as dealing
with investigations, overseeing
external auditors, and overseeing
accounting changes. These tools can
assist audit committees in executing
their oversight responsibilities.
30
Our focus on audit quality
PwC’s Investor Resource Institute
enables us to share with, listen
to, and learn from members of
the investment community of all
types and sizes, including asset
managers, pension funds, mutual
funds, buy-side analysts, sell-side
analysts, credit rating agencies,
hedge funds, and others.
Our mission is to add value
by sharing PwC’s insights and
educational materials. During
FY15, we shared our insights with
the investment community on
some of the most complex and
pressing issues of the day, including
cybersecurity, macroeconomic
megatrends, corporate governance,
disclosure reform, high-frequency
trading, and dark pools.
We also hosted 14 industry-focused
investor/analyst meetings and
two conferences. Through these
events, as well as investor surveys,
we gained an understanding of
participants’ perceptions about
financial reporting, explored
emerging trends, regulations, and
standards, and discussed other
matters of interest to them and shared
those insights in our publications.
Through our valuable interactions
with the investment community, we
were able to hear their perspectives
on financial reporting, enhance
their understanding about the
role of the auditor, utilize their
insights to inform our points of
view, and share perspectives with
them about financial reporting
accounting standards. We have
also begun to consider ways of
incorporating investor perspectives
into our learning environment
for our audit professionals.
Professional
and regulatory
A strong audit profession—one that
facilitates confidence in the capital
markets—is crucial to the success of
our Firm. There are many ways in
which the profession can do this, first
and foremost of which is executing
high quality, independent audits.
But to fully earn that confidence—
and to remain relevant to our
stakeholders—we must do more.
The regulatory environment
continues to be dynamic. Actions
taken by regulators in one part of
the world are influencing the views
and behaviors of regulators in other
parts. And, the auditing profession
and auditing standards are at the
heart of this—for example, the
auditor’s reporting model, auditor
transparency, and audit quality
indicators are just three examples
(among many others) that have been
debated in the US and abroad.
We have played an active role in these
debates, both as an individual Firm
and in collaboration with others in
the profession by working with the
Center for Audit Quality (CAQ). Our
own Chairman and Senior Partner,
Bob Moritz, recently served as the
chair of the CAQ’s Governing Board,
and in that capacity helped to lead
the profession during these public
debates. In addition, our Managing
Partner for Assurance Quality, Mike
Gallagher, serves as the Chair of the
CAQ’s Professional Practice Executive
Committee. In addition to the
technical and regulatory discussions,
through our work with the CAQ, we
engage in dialogue about professionwide matters, including how to attract
a sufficient pipeline of talent into the
profession with the skillset needed
to perform audits of the future and
identifying areas where the profession
may provide additional value to
companies and the capital markets.
We have the privilege of engaging
with a wide array of stakeholders,
including, as discussed in the previous
section, audit committee members,
directors, and members of the
investment community. We have the
opportunity to listen to their unique
perspectives, insights, and feedback
on various regulatory and profession
matters. We have the opportunity
to inform them of our views and
perspectives. And, we then have the
opportunity to continually evolve
our thinking in order to meet the
expectations of all our stakeholders.
PwC
31
Appendix: Legal and
governance structure
Legal structure
and ownership
of the Firm
Member of the Leadership Team as of the date this report
was issued
Chairman and Senior Partner
Robert Moritz, CPA
Markets, Strategy and Stakeholders Leader
and Vice Chair
Tim Ryan, CPA
Services Leader and Vice Chair
Dana Mcilwain, CPA
Governance structure
of the Firm
Assurance Leader and Vice Chair
Vincent Colman, CPA
The Firm’s Senior Partner serves
as Chairman and Chief Executive
Officer, and manages the Firm
pursuant to the powers delegated
to him by the Firm’s partners. The
Senior Partner may appoint persons
and committees to assist with Firm
management, and discusses the Firm’s
philosophy, policies and direction
with the Board of Partners and
Principals, in its governance role.
Tax Leader and Vice Chair
Mark Mendola, CPA
Advisory Leader and Vice Chair
Miles Everson, CPA
Markets and Sectors Leader and Vice Chair
Amity Millhiser, CPA
Global and US Transformation Leader and
Vice Chair
Michael Burwell, CPA
Chief Financial Officer and Vice Chair
Carol Sawdye, CPA
To assist in discharging his
responsibilities, the Senior Partner
has appointed a Leadership Team to
work with him in managing the Firm.
The responsibilities of the Senior
Partner and the Leadership Team
include establishing and determining
the effectiveness of the Firm’s system
of internal control, including those
relating to the quality of the Firm’s
audit services. All of the members of
the Leadership Team are partners or
principals. Changes to the Leadership
Team are determined by the Senior
Partner. The Senior Partner is elected
by a partner vote for a four-year
term that can be renewed twice.
US Human Capital Leader and Vice Chair
Tom Codd, CPA
Chief Diversity Officer
Maria Castañón Moats, CPA
General Counsel and Chief Risk Officer
Diana Weiss
Marketing and Sales Leader and Vice Chair
Robert Gittings, CPA
US Government, Regulatory Affairs and
Public Policy Leader
Laura Cox Kaplan
Chief Administrative Officer and Partner
Affairs Leader
Gary Price, CPA
The Firm is a limited liability
partnership established under
the laws of the State of Delaware.
All interests in the Firm are held
by its partners and principals.8
8 A partner is a certified public accountant (CPA) whereas a principal is not. Only CPAs may sign an audit opinion. Partners and principals are alike in most other aspects of
the partnership, such as sharing in profits/losses, managing risk, developing our staff, investing in client relationships, and performing services for clients. For purposes of
this Appendix, “partner” refers to both partners and principals.
32
Our focus on audit quality
Board of Partners
and Principals
Members of the Board of Partners and Principals as of the date
this report was issued
Authority
Robert Moritz, CPA
Chairman and Senior Partner
Pursuant to the authority delegated to
it by the Firm’s partners, the Board is
responsible for approving the overall
strategic direction of the Firm. It
approves long-range strategies and
business plans, and major transactions
that could significantly affect the
Firm’s business. Its authority also
includes the approval of the Firm’s
capital policies, the manner in which
partners participate in Firm profits,
and the admission of new partners.
It approves the compensation of
the Senior Partner and members
of the Leadership Team as a group,
after review and recommendation
by a committee of the Board. All
candidates proposed by the Senior
Partner Nominating Committee to
stand for election as Senior Partner
must also be approved by the Board.
Composition
Currently, members of the Board are
partners and principals of the Firm
who have been elected for staggered
terms of four years. The Board is
chaired by a Lead Director, who is
elected by the members of the Board
other than the Senior Partner. There
are 18 members of the Board in
addition to the Firm’s Senior Partner.
Brian Cullinan, CPA
Lead Director
Paul Kepple, CPA
James Kolar, CPA
Karen Lohnes
Thomas Archer, CPA
Brian Meighan, CPA
Joe Atkinson
Jacqueline Olynyk, CPA
Brendan Dougher, CPA
Alan Page, CPA
John Farina, CPA
Michael Quinlan, CPA
Saverio Fato, CPA
Deidre Schiela, CPA
Scott Gehsmann, CPA
Michael Swanick, CPA
Linda Ianieri, CPA
Reggie Walker, CPA
Committees
The Board is assisted by various
committees that help to carry out its
role. The Risk and Quality (R&Q)
Committee provides oversight and
monitors the appropriate policies,
processes and procedures for
managing and minimizing risks
of the Firm. The R&Q Committee
also comprises the Accounting
and Auditing Practice (A&AP)
Committee, which provides
oversight of the accounting and
audit practice of the Firm.
As requested by the Board, the
R&Q Committee reviews regulatory
matters that affect the Firm and, as
appropriate, other parts of the PwC
global network. Such matters may
include accounting licensing and
professional standards issues, internal
and external quality inspection
results, and global regulatory trends.
Board member selection process
The partner vote for selecting
Board members is on a headcount
basis. Partners vote by ranking
the candidates for the Board,
and the candidates with the
most votes are elected. Board
elections are supervised by an
independent election teller.
PwC
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Please see www.pwc.com/structure for further details.
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