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On October 16, 2025, Acting Chair George Botic delivered a speech at the Office of Economic and Risk Analysis Conference on Auditing and Capital Markets. In his prepared remarks, Acting Chair Botic called for the PCAOB to flexibly “react and adjust to market activity,” be “open to and actively seek out all ideas and viewpoints,” and serve as a “marketplace of ideas” by deepening engagement with academics to strengthen evidence-based oversight and investor protection. He identified three areas where “help is needed” from the conference attendees. First, Acting Chair Botic emphasized the importance of the PCAOB’s role in defining audit quality based on four core concepts: integrity and independence; technical competence; audit performance (audit execution, due professional care, and skepticism); and outcomes and impact. Second, Acting Chair Botic noted the rise of alternative financings, including private equity ownership of accounting firms and accounting firms operating in alternative practice structure environments. He acknowledged these new opportunities for growth, but also pointed out the risks they present, especially in their potential to reshape incentives and threaten independence. Finally, Acting Chair Botic called for the attendees’ assistance in helping to guide the adoption and use of AI in audits. He remarked on the billions of dollars audit firms are collectively investing in AI applications and called for the potential impact of the technology on the financial statement audit to be studied so that human judgment and professional skepticism are safeguarded. Acting Chair Botic closed by proposing collaborative steps, including developing a common definition of audit quality, coordinating with the SEC and NASBA on the risks and benefits of private equity investments in accounting firms, and hosting public roundtables on the topics of private equity investments in accounting firms and AI to guide the audit profession’s path forward. Acting Chair Botic's remarks are available here. |