Investor protection is a key focus for audit committees, fueled by high-quality audits that support reliable information for decision-making. As the PCAOB shapes its 2026-2030 strategic priorities, audit committees have the opportunity to share views about how the regulator can enhance committee oversight and help promote continued audit quality.
The Center for Audit Quality’s Audit Committee Council (ACC), an independent advisory group of audit committee members and chairs, submitted a comment letter to the PCAOB outlining three primary recommendations for the Board to consider while developing its priorities. The Council emphasizes needed improvements to the inspections program, regulatory efficiency and durability, and prioritization of initiatives.
Keep reading for details on each recommendation.
1. Strengthen the PCAOB inspections program
At the top of the ACC’s list is improving the focus, consistency and timeliness of PCAOB inspections, a primary touchpoint for audit committees and accounting firms.
A more risk-based, quality-control-oriented approach would give audit committees more meaningful information about firm-level performance and foster greater attention and investment where it is needed. These changes could also help relieve pressure on engagement teams, reinforce accountability at leadership levels and support continuity for companies.
The ACC also calls for clearer distinctions in the relative severity of findings in inspection reports to improve usefulness for stakeholders. Audit committees are interested in high-severity findings, and current formats don’t deliver that clarity. Developing a framework for assessing the severity of audit deficiencies would enhance the consistency and utility of findings.
2. Promote regulatory efficiency and durable standards
Consistency in the interpretation and application of PCAOB rules and auditing standards is essential to durable improvements in audit quality. The ACC’s letter encourages the Board to continue to evaluate whether regulatory actions are producing commensurate benefits relative to their costs for investors, issuers, auditors, and audit committees.
The Council strongly supports a model where interpretations are developed through the standard-setting function (with appropriate transparency), rather than being shaped through inspections or enforcement. This should reduce uncertainty and improve audit quality by clarifying expectations from the start.
For example, long-standing consultation and pre-clearance processes at the SEC support a uniform understanding of accounting standards and are highly valued by issuers and audit committees. A similar process is needed at the PCAOB. The ACC welcomes and supports Chair Logothetis’ announcement to design such a formal consultation process within the Office of the Chief Auditor (where standard setting resides).
It’s also critical for the Board to evaluate whether regulatory actions produce benefits relative to their costs for investors, issuers, auditors, and audit committees. Regulations should strike a balance between producing meaningful investor protection and avoiding unnecessary documentation or compliance burdens. This will help ensure that audit committees are only reviewing material matters and decision-useful information.
One area to improve efficiency is removing duplicative oversight between the SEC and PCAOB, which causes confusion and a lack of consistent application among firms. The ACC encourages the PCAOB to consider opportunities to reduce overlapping regulation to improve clarity and efficiency while maintaining investor protection. This consistency is essential for long-term, stable improvements in audit quality.
3. Prioritize initiatives with the greatest impact
High-quality financial reporting is supported by a regulatory structure that fosters shared understanding and expectations among all stakeholders, especially during periods of change. An overly expansive agenda risks stretching PCAOB resources too thin and creating confusion for firms and audit committees.
The ACC recommends disciplined sequencing, with the highest-impact initiatives addressed first. These should include projects that align most closely to the PCAOB’s investor protection mission. It was, therefore, good news to hear Chair Logothetis announce on May 6, 2026, at the Standards and Emerging Issues Advisory Group that the Board will—for the first time—issue a public consultation document to seek input on its standard-setting agenda. This is an approach taken by other regulators, including the Financial Accounting Standards Board (FASB).
Looking Ahead
Audit quality doesn’t happen in a vacuum. It depends on a rigorous inspection program, durable standards and sharp focus from regulators on what will support trust in our capital markets. For more information on the ACC’s recommendations, read the full comment letter here.
