On Sept. 3, the Public Company Accounting Oversight Board posted two documents from its Technology Innovation Alliance (TIA) Working Group, a panel chaired by Bard Member Christina Ho and composed of external experts in emerging technologies. Formed in November 2022, the group was asked to study how auditors and preparers are using new tools, and how PCAOB oversight might adapt, before concluding its work in August 2024. 

The first paper, Current State Deliverable sketches investor needs and the evolution of auditing, then takes stock of technology in today’s audit and financial reporting workflows. It also catalogs adoption hurdles, including data quality, uneven systems, and resource constraints, that firms and preparers continue to face. 

The second paper, Transforming Audit Quality Through Technology, lays out four strategic ideas the PCAOB could pursue to foster responsible innovation and protect investors: encourage creation and use of structured data in public company audits; sharpen focus on artificial intelligence in audit planning and execution; build internal capacity for regulatory innovation (including and Innovation Lab); and raise technology literacy as a core auditor competency. 

The Board emphasized that these documents reflect the working group’s views, not necessarily those of the PCAOB, individual Board Members, or staff. As Ho put it, “Innovation in public company auditing is essential because it can serve as an engine that improves audit quality.” Her hope is that the recommendations spur “renewed and urgently needed dialogue” about modernizing audit regulation to support the responsible use of technology.