Public Company Accounting Oversight Board Strategic Plan:: NOVEMBER 18, 2016

Public Company Accounting Oversight Board
Strategic Plan:
Improving the Quality of the Audit for the Protection and

Benefit of Investors
2016 – 2020
NOVEMBER 18, 2016

Table of Contents
Chairman's Message....................................................................................................... 3
Organizational Background ............................................................................................. 5
Mission ............................................................................................................................ 7
Core Values .................................................................................................................... 7
Matrix of Strengths, Weaknesses, Opportunities and Threats ........................................ 8
Goals, Objectives and Strategies .................................................................................. 10
Progress and Performance: Progress Measures and
Performance Measures and Indicators.......................................................................... 21
2
Chairman's Message
In early 2016, the PCAOB began its annual process of monitoring implementation of its
strategic plan, which was last updated in November 2015, and considering revisions
and enhancements to its strategies, in light of developments that affect our programs,
operations, and resource needs. That process benefitted from extensive involvement of
Board members and key staff in our divisions and offices, as well as important input
from the SEC. In developing this revised plan to support the 2017 budget and guide the
next five years of the Board’s work, the Board and its staff focused on, among other
things, streamlining the plan by highlighting key initiatives to better serve investors,
eliminating redundant strategies and/or recurring non-strategic activities and
consolidating overlapping and similar strategies.
Updates to the Plan
In particular, through this process, the discussion of the internal and external
environment in which the PCAOB operates has been updated (1) to highlight additional
opportunities related to --
 identifying more effective ways to engage investors and others in PCAOB

rulemaking,
 leveraging cross-divisional insights and economic analysis to establish an
effective broker and dealer auditor oversight program,
 strengthening the economic and risk analysis program area by integrating
the economic analysis and risk analysis functions, and
 addressing changing circumstances, such as recently issued accounting
standards involving significant implementation and auditing challenges
and growth of consulting and other emerging developments in business
practices at firms; and
(2) to refine the nature of the weaknesses relating to competition for talent and
updating the PCAOB IT systems, in light of recent hiring experience and budgetary
considerations, as well as recent progress with respect to certain IT upgrade efforts.
We have also revised the plan to update initiatives relating to the PCAOB’s new
standard-setting process, planning for and adopting a permanent broker-dealer
inspection program, inspecting firms located in China, audit quality indicators,
monitoring and developing reports related to independence and the business model of
the firms, and business continuity. Also, economic analysis-related initiatives have
been refined and incorporated into Goal 1 of the plan to highlight the strengthening of
the PCAOB’s economic and risk analysis functions, as well as the integration of this
program area with other PCAOB oversight program areas. The "Progress and
Performance" section of the Plan also has been updated to reflect developments as of
September 30, 2016.
3
Near-Term Focus
While the updated plan contemplates goals, objectives and strategies over the next five
years and the PCAOB will continue to undertake these strategies to achieve our
mission, I view the following as priority projects for 2017 –
 consolidating and strengthening our economic and risk analysis program area to
enhance available resources and augment expertise, and further integrating this
program area with our other oversight programs, including standard-setting, to
achieve the most effective outcomes to further investor protection and enhance
audit quality;
 further improving our standard-setting program, including further development,

implementation, and sustainability of processes, including when and how we
conduct research on projects, add projects to the research and standard-setting
agendas, and obtain public comment, all to advance the PCAOB’s standard-
setting agenda and to effectively serve investors;
 developing the approach to inspections of broker-dealer auditors under a

permanent program, including proposing rules informed by economic analysis
and cross-divisional insights;
 continuing to identify ways to further automate, streamline and improve our

processes and consider other cost-effective strategies to maximize staff
utilization and productivity and further promote the careful stewardship of the
PCAOB’s resources; and
 pursuing a recently commenced diversity and inclusion project to foster a culture

of inclusion, collaboration and innovation empowering each employee to reach
his/her full potential.
With respect to advancing our standard-setting agenda to further protect investors, we

look forward to several significant developments in the coming year. First, beginning in
2017, registered audit firms will be required to disclose the names of engagement
partners and other accounting firms that participated in audits of public companies. With
this advancement, investors and others will know who is leading and participating in
audits through these filings, adding more specific data points to the mix of information
that can be used when evaluating audit quality. In addition, by the end of 2016, we
expect to consider historic changes to the standard pass-fail form audit report to
enhance the relevance of audit reports.
While the Board continues to evaluate its work and identify ways to enhance its
programs and processes, it continues to remain focused on its key initiatives to serve
investors. We take pride in the accomplishments and commitment of our staff and their
dedication to the PCAOB’s mission in all of these endeavors.
James R. Doty
Chairman
4
Organizational Background
The Public Company Accounting Oversight Board (the "PCAOB" or the "Board")
developed this Strategic Plan to guide our programs and operations, and the
development and execution of our annual budget.
The Sarbanes-Oxley Act of 2002 (the "Act") established the PCAOB to oversee the
audits of the financial statements of public companies in order to protect the interests of
investors and further the public interest in the preparation of informative, accurate and
independent audit reports.1 In July 2010, the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the "Dodd-Frank Act") amended the Act and, among other
things, vested the PCAOB with the authority to oversee the audits of the financial
statements and related reviews of selected practices and procedures, of broker-dealers.
We have designed our programs to address our four primary responsibilities under the
Act:
(i) registration of accounting firms;
(ii) inspections of registered firms' audits and quality control systems;
(iii) establishment of auditing and related attestation, quality control, ethics,

and independence standards; and
(iv) investigation and discipline of registered public accounting firms and their
associated persons for violations of specified laws, rules or professional
standards.
We analyze information obtained in our inspections, investigations, and other sources,

to identify risks that may have resulted in, or could lead to, audit, quality control, ethics
or independence deficiencies by registered firms. We also use such information to
analyze the potential need for changes to auditing and related professional practice
standards and to evaluate the need for guidance on how to apply such standards in
particular circumstances. We further use this analysis to identify ways in which we can
improve the effectiveness of our oversight programs.
The Act gives the Securities and Exchange Commission (the "SEC") oversight authority
over the PCAOB, including the authority to appoint and remove the Board's five
members. The PCAOB is subject to rules and orders promulgated by the SEC.
Moreover, PCAOB rules, including our auditing and related professional practice
standards, are not effective unless approved by the SEC. Our annual (and any
supplemental) budgets and accounting support fees are also subject to SEC approval.
And, as provided in the Act, PCAOB inspection report findings, adverse remediation
determinations, and disciplinary actions against registered firms and their associated
persons are subject to review by the SEC.
1
This Plan uses the term "public companies" as shorthand for the companies that
are "issuers" under the Act and the Board's rules. This includes domestic public
companies, whether listed on an exchange or not, and foreign private issuers.
5
This Strategic Plan sets forth goals, objectives and strategies to achieve our mission. In
addition, consistent with the SEC rule on the approval process for the PCAOB’s annual
budget, this Strategic Plan provides the framework for developing and executing that
budget. Specifically, we have established the following three overarching goals –
Goal 1: Effective Oversight: Foster effective use of our unique knowledge and
insight into audit practices, risks, and trends to design and implement
the most effective audit oversight programs and regulatory activities
that will further investor protection and the public interest in
informative, accurate and independent audit reports
Goal 2: Constructive Impact: Make a positive difference in the market for audit
services and advance trends for quality financial reporting by
enhancing the relevance, quality, and transparency of the audit and
strengthening independence, objectivity, professional skepticism and
accountability in audit firm culture for the benefit of the investing public
Goal 3: Dedicated People: Establish a collaborative workplace culture that

supports our mission by promoting excellence, integrity, fairness,
diversity and inclusion, accountability, and careful stewardship of our
resources
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Mission
To protect the interests of investors and further the public interest in the preparation of
informative, accurate and independent audit reports.
Core Values
In pursuing our mission, the PCAOB is committed to the following values –
 Public Interest and Stewardship: We are committed to protecting investors

and serving the public interest when carrying out our responsibilities in a
manner that demonstrates careful stewardship over our resources.
 Excellence, Integrity and Fairness: We are committed to quality and

continual learning in an environment that demands the highest personal and
professional conduct exercised in a consistent, equitable and balanced
manner. In exercising our oversight authority, the PCAOB strives to treat
registered public accounting firms and associated persons in a fair, impartial
and consistent manner.
 Teamwork and Diversity: We are committed to maintaining a collaborative

work environment based upon a culture of openness, cooperation, trust,
accountability and respect. We are committed to enhancing our practice of
inclusiveness and to seeking to enrich our programs through a staff that
brings a diversity of experience, skills, cultures, and backgrounds to its work.
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Matrix of Strengths, Weaknesses,
Opportunities and Threats
In developing this Strategic Plan, we have taken into consideration the environment in
which we operate, including both the environment in which financial reporting and
auditing take place as well as the PCAOB's own internal and operational environment.
We have considered the PCAOB's strengths (characteristics that should be built upon to
endure and can be used for the PCAOB to achieve its mission), weaknesses
(characteristics or obstacles that should be mitigated or addressed if the PCAOB is to
achieve its mission), opportunities (factors and situations, both internal and external,
that could allow the PCAOB to further its mission) and threats (challenges that may
adversely affect the PCAOB's programs and operations or prevent the PCAOB from
achieving its mission).
The Board's goals, objectives, and strategies in this plan are designed to take
advantage of the opportunities presented to the PCAOB by using its strengths,
recognizing and, where possible, addressing its weaknesses, making appropriate use of
such opportunities and addressing and minimizing its threats ("SWOT analysis").
Strengths Weaknesses
 PCAOB's independence and role as a financial  Non-public nature of the Board's disciplinary process
sector regulator chartered to protect investors under the Sarbanes-Oxley Act deprives the public of
 Experienced and knowledgeable staff who are the Board's views about potentially serious
committed to our mission, providing a foundation departures from applicable rules and standards and
for a robust auditor oversight program impedes broader compliance. This weakness is
 Unique knowledge and information related to structural and would require legislative action to
issuer and broker-dealer audit practices gained remedy
through more than twelve years of inspection and  Restrictions on public reporting of both certain
enforcement experience inspections information and our analysis of
 Direct and timely communication with individual inspection results that may potentially lessen our
audit firms related to such firms’ inspection results value to the investing public, including audit
and remediation progress committees
 Close working relationship with other regulators  Competition for and ability to retain talent particularly
and standard setters, including the SEC, Financial in certain hiring pools, which may be affected by
Accounting Standards Board ("FASB"), Financial budgetary considerations
Industry Regulatory Authority ("FINRA") and other  Necessity to update several remaining outdated
U.S. and non-U.S. regulators and standard setters information technology systems, which were
implemented in the early years of the PCAOB’s
existence
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Opportunities Threats
 Identify more effective ways to engage investors and  Lack of access to certain non-U.S. firms for
other interested parties in PCAOB rulemaking purposes of inspections or investigations
 Leverage the market's interest in information about the  Potential disengagement by non-U.S.
audit, including through encouraging use of audit quality regulators from a meaningful joint inspection
indicators, in order to enhance the relevance of the process
audit and to engage with interested parties to enhance  Ongoing and evolving serious risks presented
an understanding of the inspection process and the by the information security landscape,
benefits of timely remediation to improve future audits exposing the PCAOB and other organizations
 Strengthen research and analysis program area by  Potential threats to independence and audit
further integrating economic and risk analysis functions quality posed by the current business
to enhance resources available and augment expertise model of the audit firm, including --
to make both functions more effective  firms’ expansion of consulting and tax
 Leverage knowledge and experience from our interim advisory services,
broker-dealer audit inspection program, as well as  limited growth in core audit revenue,
cross-divisional insights and economic analysis, to  inability of investors to judge audit quality,
establish an effective broker-dealer auditor oversight  incentive systems within the firms
program misaligned with audit quality, and
 Continue to implement measures for more efficient and  accelerated technological change in core
effective standard setting, focus on the sustainability of audit services
the improved process, and leverage such process to
issue, on a timely basis, standards that spur appropriate
changes in auditor behavior and performance
 Build on our regulatory experience to address changing
circumstances, such as (1) recently issued accounting
standards that involve significant implementation and
potential auditing challenges and (2) growth of
consulting practices and other emerging developments
in business practices at firms, including acceleration of
technology innovation, data analysis and globalization
of core audit services
 Use inspections to address challenges posed by the
separate ownership structure of the affiliates of global
networks in identifying and analyzing systemic root
causes of audit deficiencies across these networks and
share that information where appropriate with non-U.S.
regulators
 Leverage advances in our understanding of audit risk,
financial reporting and audit practices, and emerging
developments, such as advances in technology and
data analytics, to update audit performance standards
 Establish new and enhance existing relationships,
including through the exchange of information, with
regulators and international organizations around the
world to improve the relevance and quality of the audit
and to improve investor protection
 Enhance the PCAOB's outreach to audit committees
through regular communications and explore ways to
further promote two-way interactive communication
between the PCAOB and audit committees
 Advance the development of our administrative
operations, including human resources, financial and
risk management, business continuity and employee
safety, to further support our mission and short- and
long-term goals and initiatives
 Pursue a diversity and inclusion project to foster a
culture of inclusion, collaboration and innovation
empowering each employee to reach his/her full
potential, in light of employee engagement survey
results
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Goals, Objectives and Strategies
Objectives:
A. Effectively and efficiently identify and respond to emerging audit risks and
trends
Strategies
 Analyze Potential Emerging Areas of Audit Risk. Analyze current
events and emerging trends that may lead to increased audit risk, such as,
for example, changes in domestic and global economic conditions, new
accounting standards and cybersecurity risks that could affect financial
reporting. Analyze trends and developments that could impact auditors’
responses to such risks or affect auditor performance, such as new
developments in technology, data analysis, and other audit tools.
 Use Knowledge from Oversight. Use the knowledge gained from our
oversight activities and outreach to identify emerging risks and trends and
develop appropriate responses through issuing standards, publishing audit
practice alerts, consultation papers, summary reports, staff briefs,
research notes, policy statements, interpretative releases, speeches and
other means.
 Continue to Enhance Technological Capabilities to Support

Enhanced Risk Analysis. Continue to support and enhance an
integrated data collection platform to provide timely relevant information
and analysis to the PCAOB's inspection, enforcement and standard-
setting programs.
 Implement Measures for More Efficient and Effective Standard

Setting. Continue the implementation of new processes, including
measures identified through the PCAOB’s review of its standard-setting
process (such as measures related to when and how the PCAOB
conducts research on projects, adds projects to its research or standard-
setting agendas, and obtains public comment), as well as its post-
implementation review initiative, to advance standard-setting initiatives
more efficiently and effectively.
 Seek Insight on PCAOB Standard Setting. Facilitate evidence

gathering and research by exploring and developing new mechanisms to
appropriately engage the participation of a broad cross-section of external
parties, including investors, preparers, auditors, academics and the public.
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Seek input on projects on the PCAOB's standard-setting agenda and new
research agenda, including by further integrating the PCAOB’s risk
analysis and research activities to inform standard-setting priorities.
 Engage Effectively with Other Standard Setters and Regulators.

Engage effectively in the standard-setting projects of other U.S. and non-
U.S. standard setters and regulators, and share information, insights and
concerns among regulators as appropriate. Share observations and
possible challenges related to the implementation and auditability of new
or proposed accounting standards.
 Contribute to Audit Issues Debate. Contribute to the debate on issues

relevant to auditor oversight by participating in and, where appropriate,
taking a lead in regional, national and international meetings and
conferences to share knowledge and develop insights. Focus, as
appropriate, on roles of the regulator, auditor, audit committee, and the
audit market in maximizing enhancements to audit quality, as well as on
the implications of new developments in technology and data analytics for
the future of the audit.
B. Identify and respond to audit opinions issued without reasonable basis,

understand root causes of deficiencies, and communicate insights on audit
practices
Strategies
 Improve the Quality of Audits Through the Inspections
Process. Protect the interests of investors in high quality audits by using
inspections to assess firms’ compliance with applicable standards and
rules and to identify quality control deficiencies. Respond to detected
weaknesses and deficiencies by issuing inspection reports and assessing
remedial actions taken. Conduct inspections, issue inspection reports and
review remedial efforts in a timely manner, maintaining high standards of
thoroughness, consistency and technical accuracy.
 Analyze Root Causes of Quality Control and Audit Deficiencies and

Evaluate Remediation Efforts. Collect and analyze the root causes of
quality control and audit deficiencies identified by the PCAOB and the
firms. Issue information to firms and the public about root-cause analysis
of systemic issues and firms’ remediation efforts that the PCAOB has
observed.
 Emphasize the Need for Strong Quality Control in the Global Network
Firms. Through the global network firm inspection program, advance
across all global network firms (1) the effective use of root-cause analysis
of systemic issues and (2) global firm-wide commitment to timely and
effective remediation.
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 Promote Quality Control Among the Non-Affiliate Firms. Continue to
refine the process to engage firms early in the remediation process to
review and provide feedback on firms' draft remediation submissions and
to discuss root cause analysis.
 Use Disciplinary Authority to Protect Investors and Achieve

Deterrence and Accountability. Respond to non-compliance with
applicable laws and standards by conducting investigations and
disciplinary proceedings and imposing sanctions, as appropriate.
Prioritize matters involving independence violations or elevated potential
risk of harm to investors or to Board processes, such as when a firm has
issued an unsupported audit opinion, altered documents and/or failed to
cooperate with the PCAOB. Strive to conduct investigations and
disciplinary proceedings in a timely manner to enhance deterrence and
accountability, maintaining high standards of thoroughness and fairness.
 Use Risk Analysis to Guide Inspections and Investigations. Use risk

analysis to guide inspections and investigations, with a focus on
addressing risks associated with (1) global networks of firms, (2) foreign
markets, including China, (3) effects of global economic trends and issues,
including for example audit issues regarding fair value, estimates and
impairment, and potential future risks, (4) audits of financial statements
under IFRS, and (5) growth of firms’ consulting practices. Consider
whether new areas of inspection or enforcement focus should be added in
light of major risk to audit integrity.
C. Further develop an infrastructure to carry out oversight authority relating

to broker-dealer auditors
Strategies
 Plan for and Adopt a Permanent Inspection Program. Develop the
approach to inspections under a permanent program, issue proposed and
adopt final rules, informed by economic analysis and cross-divisional
insights, and implement the program.
 Continue to Conduct Inspections under the Interim Inspection

Program and Report on the Progress. Until implementation of a
permanent broker-dealer auditor inspection program, continue to conduct
inspections under the interim program and report on the progress of the
interim inspection program to describe significant observations from
inspections, address matters related to the development of a permanent
inspection program, and provide an overview of anticipated future actions.
 Respond to Audit and Attestation Deficiencies. Take appropriate

actions to address deficiencies identified by inspection staff related to
broker-dealer audit and attestation engagements, including observations
relating to independence violations. Emphasize inspection findings
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generally in communication, and in coordination, with the SEC and FINRA
as needed, and take disciplinary actions where appropriate.
D. Reinforce and extend the emerging cross-border audit oversight regime,

consistent with the particular needs and circumstances of the participants
Strategies
 Complete Bilateral Cooperative Arrangements with Remaining
European Regulators and Strengthen Existing Cooperative
Relationships. Complete bilateral cooperative arrangements with audit
regulators in the remaining European Union (“EU”) jurisdictions in which
there are registered public accounting firms that are subject to PCAOB
inspection. Continue to provide appropriate disclosure and consider other
practical options should limitations on the PCAOB’s access to inspect
registered firms in the remaining EU jurisdictions persist. Strengthen
existing relationships with audit regulators in EU and other jurisdictions,
including through joint task forces, joint inspections, cooperation on
investigations, resource sharing and training and by continuing to consider
best approaches to working with other regulators and appropriate
evolution of cooperative arrangements.
 Follow Through on the Outcomes of the U.S.-China Strategic and

Economic Dialogue and Address Inability to Inspect Auditors of
China-Based Companies. Achieve a permanent program to inspect
registered public accounting firms located in China or that audit China-
based companies. However, if a permanent inspection program cannot
be achieved, pursue practical options to address the PCAOB's inability to
inspect such firms.
 Participate as Leaders in IFIAR. Facilitate the sharing among

independent audit regulators around the world of unique data and
knowledge gained through regulatory oversight activities to further investor
protection globally through the PCAOB’s participation in the governance
and leadership of the International Forum of Independent Audit Regulators
("IFIAR").
 Coordinate Cross-Border Information Sharing, Investigations,

Regulatory Policy and Trend Analysis. Coordinate cross-border
investigations, regulatory policy and trend analysis with the SEC and
interact and share information effectively and appropriately with other U.S.
and non-U.S. regulators, international organizations, and auditing
standard setters, to foster better audit quality globally.
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E. Enhance the use of economic and statistical analysis and empirical tools
throughout PCAOB programs
Strategies
 Prepare Economic Analyses to Inform Standard-Setting Initiatives
and Other PCAOB Rulemakings. Ensure that regulatory decisions,
including whether to adopt new requirements and impose corresponding
burdens, are informed by rigorous economic analysis. Help tailor
solutions to identified problems and provide information and analyses that
allow the Board, the SEC, and the public to compare the relative merits of
different approaches. Develop working papers that summarize relevant
economic and behavioral theories and research related to auditing to
facilitate the PCAOB’s economic analysis and its engagement with
investors, academics, audit committees and other stakeholders.
 Maintain a Program to Conduct Post-Implementation Reviews of

PCAOB Standards and Rules. Evaluate the overall effect of PCAOB
standards and rules including by evaluating whether a rule or standard is
accomplishing its intended purpose; identifying, wherever possible, costs
and benefits; and identifying unanticipated consequences, either positive
or negative. Use insights from the reviews to enhance prospective
economic analysis on standard-setting initiatives and otherwise inform
PCAOB oversight activities.
 Enhance the Use of Economic Analysis and Tools in the PCAOB's

Oversight Programs. Apply economic and statistical analyses to
measure the effectiveness of PCAOB oversight activities and identify and
implement opportunities to improve the PCAOB’s critical processes.
 Identify, Organize, Structure and Analyze Data Required for

Economic Research, Standard Setting and Other Internal
Programmatic Needs. Review and analyze internal and external data
needed to conduct high-quality economic analysis in standard setting and
to inform the PCAOB’s oversight activities.
 Maintain an Inspections Fellowship Program. Maintain an inspection

fellowship program in the economic and research analysis program area
to provide practical and current audit and oversight experience in support
of this program area’s work and facilitate collaboration with other offices
and divisions.
 Foster Economic Research on Topics Relevant to the PCAOB’s

Mission by Maintaining a Fellowship Program, Holding Economic
Conferences, and Maintaining an Internal Seminar Series. Develop a
vibrant fellowship program that generates high quality publishable
economic research on topics that are of direct relevance to the mission of
the PCAOB and provides an outside perspective in analyzing data
collected by the PCAOB through its oversight activities. Plan and hold
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economic conferences with leading economists and other academics to
present and discuss scholarly papers on audit-related topics and promote
to both auditing firms and the investing public a better understanding of
the role and importance of audits in capital markets and the impact of the
PCAOB. Arrange internal seminars at which scholars present research on
issues directly related to the PCAOB’s oversight activities and discuss
those issues with PCAOB staff and Board members. Foster dialogue with
the academic community.
 Analyze Research and Data Related to Financial Statement Fraud to

Inform PCAOB Oversight Activities, Including Potential Standard-
Setting. Analyze research and data related to the auditor's approach to
detecting financial statement fraud, economic impacts of financial
statement fraud, and trends in financial statement fraud, and seek to
encourage further academic research in these areas.
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Objectives:
A. Improve the relevance and usefulness of the audit report for the investing
public and enhance transparency in the audit process and firm business
model
Strategies
 Analyze Comments and Views Received on How the Audit Report
Could be Made More Relevant and Useful and Adopt a Standard.
Continue to analyze insights from research, roundtables, consultation,
economic analysis and public comment regarding potential changes to the
auditor's reporting model. Adopt an appropriate standard to implement
changes to the audit report to provide investors with a more informative
and meaningful audit report.
 Improve Transparency in the Audit Process including the Audit

Report. Improve transparency in the audit process, through among other
efforts, (1) implementing new rules requiring the identification of audit
engagement partners and other accounting firms participating in audits,
(2) expanding the audit report, (3) identifying and encouraging the use and
academic study of audit quality indicators, and (4) coordinating with the
SEC on its audit-related and other initiatives.
 Monitor and Support the Implementation of the Auditor Reporting

Standard, if approved by the SEC. Monitor and support the
implementation of the auditor reporting standard, if approved by the SEC,
including considering the need for guidance.
 Analyze and Report on the Firm Business Model. Continue to analyze

research and developments related to business model of large audit firms,
including new developments in technology and data analytics at such
firms, and consider appropriate means to communicate the implications of
aspects of this model on audit quality.
B. Enhance auditors' independence, objectivity, and professional skepticism
Strategies
 Monitor and Hold Auditors Accountable Through Inspections and
Enforcement. Monitor and hold auditors accountable to high standards of
independence, objectivity and professional skepticism through inspections
and, where necessary, disciplinary proceedings.
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 Monitor and Report on Emerging Threats to Independence and
Develop Appropriate Responses. Monitor audit practice for emerging
threats to independence and develop appropriate responses, with a view
to the PCAOB reporting on the evolution and structure of audit and non-
audit services offered by accounting firms and possible implications of
their multi-disciplinary business model to independence and audit quality.
C. Improve transparency related to the PCAOB's activities and engage

stakeholders
Strategies
 Improve the Content and Readability of Inspection Reports and
Provide Information on Inspection Activities and Results through
General Reports and Inspection Briefs. Continue to enhance the
content and readability of inspection reports and general reports and
provide information on a regular basis related to inspection activities and
results for all categories of registered firms. Develop and issue general
reports and/or inspection briefs to provide timely and informative insights
on the inspection process. Recognizing the inherent limitations in the
public reporting of certain inspection information, identify other ways to
communicate to investors, preparers, auditors and other interested parties
analyses and results of PCAOB oversight activity, consistent with the
framework of the Act.
 Communicate the Benefits of Public Enforcement Proceedings.

Continue to inform interested constituencies about the benefits of public
enforcement proceedings the concurrent limitations created by the
confidentiality of PCAOB-filed enforcement proceedings, and related
legislative proposals that would address this issue.
 Provide PCAOB Information and Related Training for Auditors of

Smaller Firms and Broker-Dealer Firms Through Forums. Provide
PCAOB information, training, and access to PCAOB personnel for
auditors of smaller issuers and brokers and dealers through Forums on
Auditing in the Small Business Environment and for Auditors of Broker-
Dealers, utilizing both live and web-based delivery methods.
 Expand Outreach through Targeted Webcasts. Use webcasts to

educate and inform auditors about important performance topics, new
auditing standards and other relevant, emerging issues.
 Enhance the Usefulness of the PCAOB's Website as an Effective and

Efficient Tool to Communicate with Stakeholders. Continue to identify
ways to make the PCAOB's website more useful for the investing public
and audit committees, including enabling investors to identify, via ticker
symbol and company name, an issuer's auditor, engagement partner, and
other firms that participated in the audit.
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 Extend Outreach to Audit Committees. Extend the PCAOB's outreach
to and interaction with audit committees to constructively engage in areas
of common interest, including auditor independence, objectivity and
professional skepticism and audit quality. Engage the Board's advisory
groups and others in discussion to further explore these and other areas
of common interest, such as approaches to internal control over financial
reporting and implications for audit quality. Develop and issue regular
communications to provide better, targeted access to information for audit
committees, and consider roundtables, seminars or other forums to
facilitate dialog with audit committee members.
 Host and Participate in Programs for Other Regulators. Continue to

host and participate in educational and technical assistance programs for
other regulators, including non-U.S. audit regulators on a bilateral and
multilateral basis, to promote strong relationships among regulators and
independent audit oversight globally. Participate as presenters and
panelists at international workshops and conferences and host regulatory
institutes and forums that utilize practical experiences to promote
constructive dialogue among regulators on effective audit regulation.
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Goal 3: Dedicated People: Establish a collaborative workplace culture that
supports our mission by promoting excellence, integrity, fairness,
diversity and inclusion, accountability, and careful stewardship of our
resources
Objectives:
A. Attract, retain and develop a highly skilled, diverse and innovative staff
with the utmost integrity
Strategies
 Maintain a Culture that Emphasizes Integrity, Effectiveness and
Accountability of Programs and Operations. Emphasize to staff and
potential recruits the importance of integrity, effectiveness, fairness and
accountability of the PCAOB's programs and operations by continuously
promoting robust ethics, compliance and internal oversight functions.
 Recruit from Diverse Backgrounds. Recruit experienced and

knowledgeable individuals with diverse backgrounds, including through
enhanced outreach to encourage underrepresented groups to consider a
career at the PCAOB.
 Further Develop Highly-Skilled Staff. Enhance the PCAOB's training

programs and support other training opportunities with (1) initiatives to
deepen technical skills, and (2) career and leadership development
opportunities for PCAOB staff, including cross-divisional development
opportunities such as rotations to other divisions and offices.
 Engage Staff. Continue to develop and implement appropriate employee

engagement and retention programs based on evaluations of
compensation and benefits programs and the PCAOB's engagement
survey results. Opportunities include providing career and leadership
development, cross-divisional training opportunities, succession planning,
work-life balance, market competitive benefits, performance-based
compensation, enhanced performance-management programs, and non-
monetary rewards such as recognition programs and awards.
 Develop a Human Capital Strategic Plan. Develop a robust Human

Capital Strategic Plan that, in addition to articulating the PCAOB's
approach to utilizing its human capital, focuses on developing
mechanisms for assessing the Board's diversity, strengthening its
inclusion efforts and monitoring the engagement levels of staff.
19
B. Promote the careful stewardship of PCAOB resources
Strategies
 Strengthen Resources and Expertise. Adjust workforce mix,
information technology, tools, and methodologies to support programmatic
and administrative operations, to ensure accountability is maintained, and
to further identify efficiencies allowing staff to focus more deeply on
mission-related work.
 Strengthen Operational and Reporting Processes. Continue to

improve our internal processes in programmatic and administrative areas,
using technology as applicable.
 Evaluate and Modernize Information Systems that Support Core

Human Resources, Finance and Other Processes. Continue to
evaluate and modernize information systems that support core Human
Resources, Finance and other processes, with a view to increasing
process efficiencies, reducing system complexity, and enhancing
automation.
 Reassess and Align the PCAOB's Office Space with Business Needs.
Continue to reassess the condition, type, quantity and location of office
spaces required to enhance employee effectiveness and support the
PCAOB's initiatives, including undertaking renovation projects as needed.
 Continue to Enhance Employee Safety. Continue to enhance employee

safety in PCAOB facilities and while on travel by assessing risks,
monitoring effective practices, evaluating opportunities to improve safety,
providing staff training, and developing and implementing appropriate
measures to continue to promote safety.
 Enhance and Maintain the PCAOB’s Business Continuity Planning

Activities. Continue to maintain an emergency preparedness plan and
refine continuity of operations plans to mitigate the effects of a business
interruption, emergency or disaster on the PCAOB’s operations.
 Continue to Enhance the PCAOB's Ability to Respond to

Cybersecurity Threats. Continue to evaluate cybersecurity threats by
leveraging both internal and external assessments of risk and implement
solutions to address the risks identified in the process.
20
Progress and Performance:
Progress Measures and
Performance Measures and Indicators
While we recognize the inherent difficulties in measuring improvements and progress in

audit quality and the ultimate impact on the investing public of the PCAOB's program
activities, we are monitoring our progress in meeting our goals and objectives over the
next several years, relying on a combination of progress and performance measures,
both qualitative and quantitative.2
Progress measures (i) represent specific actions that result in progress toward certain
priorities that were set out in the Chairman’s messages in our recent Strategic Plans,
and (ii) have been built into our subsequent plans.
We have also established certain quantifiable performance measures and indicators,

which are designed to assist in demonstrating the PCAOB's progress in achieving its
mission. Performance measures relate to certain activities for which the PCAOB is
directly responsible; the indicators relate to those activities that the PCAOB may not
directly control but which may be of interest for management or policy purposes. The
results associated with the measures and indicators provide us with additional
information and insight into our performance relative to our current and past efforts.
The measures and indicators also assist in determining how we may need to add to or
reallocate resources, which in turn informs the PCAOB's annual budgets.
As our organization gains more experience and with guidance from our economic and
risk analysis program area, we will continue to seek additional ways – both qualitative
and quantitative – to evaluate our processes and progress in achieving our mission.
Towards this end, we continue to pursue the strategy of evaluating and refining the
PCAOB's performance measures.
2
Qualitative measures include discussions such as those found in our general
reports, and other descriptive summaries of registered firms' audit practices that
demonstrate the effect of the PCAOB's oversight activities. Quantitative measures
demonstrate an objective assessment of our ability to achieve results.
21
Progress Measures – Certain Priorities from Recent Strategic Plans3
Near-Term Priority: Inspection Reports

Description: Improving the timeliness, content and readability of inspection reports,
including through outreach designed to improve usefulness of reports
Actions Taken since November 2012:
 Maintained an operational focus on the timely issuance of inspection reports.
 Developed and implemented timeline and process improvements with a continued
focus on maintaining quality.
 Solicited and evaluated feedback from various constituencies on inspection reports
related to references to PCAOB auditing and quality control standards or other rules,
and developed options for providing additional linkage of findings in inspection reports
to such standards and rules in subsequent inspection reports.
 Conducted outreach to the Standing Advisory Group ("SAG"), the Auditing Section of
the American Accounting Association, the Investor Advisory Group ("IAG"), Forums
on Auditing in the Small Business Environment, and other venues about
improvements to the usefulness of PCAOB inspections reports. As part of these
outreach efforts, the PCAOB began to collect valuable feedback on the content of the
PCAOB's inspections reports.
 Solicited views and began evaluating feedback from certain audit committee
members on how the Board may improve the usefulness of its publicly issued
inspection reports.
 Revised PCAOB's inspection report formats to –
 reference inspection findings in inspection reports to PCAOB auditing and quality
control standards or other rules and consolidated standard language in certain
inspection reports to one area of the report; and
 add tables and data in inspection reports to provide additional information and
transparency related to the inspection findings and issuers inspected. The data
and tables include, for example, the industries and revenue ranges of the issuers
inspected and the industry and financial statement areas related to inspection
findings.
3
These measures track progress with respect to certain priorities identified in the
PCAOB's recent strategic plans, including the near-term priorities from the November
2012 Strategic Plan and economic analysis integration and improvements in the
PCAOB's standard-setting program in the November 2013, November 2014 and
November 2015 Strategic Plans. The priority project on improvements in the standard-
setting program from the November 2014 Strategic Plan replaces and supersedes the
near-term priority on standard setting from the November 2012 Strategic Plan. In
addition, the near-term priority from the November 2012 plan on the timeliness of
remediation determinations and information on process, which was included as a
progress measure in recent strategic plans, is no longer a strategic activity but rather
has been incorporated into the Division of Registration and Inspections’ recurring
activities.
22
Status: Efforts made with respect to this priority in 2013, 2014, 2015 and 2016 have
resulted in new processes and program work, which are now incorporated into enhanced
strategy, Goal 2.C.1 (Improve the Content and Readability of Inspection Reports and
Provide Information on Inspection Activities and Results through General Reports and
Inspection Briefs) that the Board will further pursue in 2017.
Near-Term Priority: Audit Quality Indicators

Description: Initiating a project to identify audit quality measures, with a longer-term goal of
tracking such measures with respect to domestic global network firms and reporting
collective measures over time
 Surveyed existing work on audit quality indicators, and developed a preliminary
framework for the continuing project on potential audit quality indicators.
 Solicited feedback from the SAG, IAG, the Auditing Section of the American
Accounting Association, and other groups.
 Evaluated data currently available from the inspections process that could inform the
audit quality indicators project and held ongoing discussions with inspections staff on
the nexus between root cause analysis and audit quality indicators.
 Issued and obtained public comment on the Concept Release on Audit Quality
Indicators.
 Evaluated and classified more than 50 comment letters on the Concept Release.
 Made a detailed presentation and conducted breakout sessions, at the November
2015 SAG meeting, to discuss the comment letters and future paths for the audit
quality indicator project.
 Briefed the Board on alternative paths for the project.
Status: Efforts made with respect to this priority in 2013, 2014, 2015, and 2016 have
resulted in new processes and program work, which are now incorporated into the following
enhanced strategies that the Board will further pursue in 2017: Goal 2.A.2 (Improve
Transparency in the Audit Process including the Audit Report).
23
Near-Term Priority: Analysis of Inspections Findings
Description: Enhancing the PCAOB's processes and systems to improve analysis and
usefulness of PCAOB inspections findings, including comparative analysis across firms over
time, in order to better understand audit quality in firms and better inform the PCAOB's
standard-setting and its other regulatory activities
 Issued Observations from 2010 Inspection of Domestic Annually Inspected Firms
Regarding Deficiencies in Audits of Internal Control Over Financial Reporting.
 Issued Observations Related to the Implementation of the Auditing Standard on
Engagement Quality Review.
 Published a general report on observations related to the PCAOB’s “Risk
Assessment” auditing standards.
 Published a general report on observations related to PCAOB rules and auditing
standards on communications with audit committees.
 Developed a new series of publications, “Staff Inspection Briefs”, and published six
reports:
o Information about 2015 Inspections of Auditors of Brokers and Dealers
o Information about 2015 Inspections.
o Preview of Observations from 2015 Inspections of Audits of Issuers
o Preview of Observations from Inspections of Auditors of Brokers and Dealers
o Information about 2016 Inspections of Auditors of Brokers and Dealers
o Information about 2016 Inspections
 Reinforced continual interaction among our standard-setting, inspections, research
and analysis, and enforcement programs to discuss inspection findings and trends.
 Enhanced the PCAOB's Inspections Information System to improve and facilitate
inspection process workflow and analysis.
 Developed a compendium of domestic global network firm inspection report findings
for internal use and analysis.
 Allocated resources to expand the compendium to include all registered firm
inspection report findings.
 Used compendium of inspection report findings to assist research for certain
standard-setting projects as well as economic analysis research.
resulted in new processes and program work, which are now incorporated into enhanced
strategies, Goal 1.E.3 (Enhance the Use of Economic Analysis and Tools in the PCAOB’s
Oversight Programs), Goal 1.E.4 (Identify, Organize, Structure and Analyze Data Required
for Economic Research, Standard Setting and Other Internal Programmatic Needs) that the
Board will further pursue in 2017.
24
Near-Term Priority: Audit Committee Outreach
Description: Enhancing PCAOB's outreach to and interaction with audit committees to
constructively engage in areas of common interest, including auditor independence and
audit quality
 Developed materials, such as Audit Practice Alerts Nos. 10, 11, 12, 13, summary
reports on inspections observations on internal control over financial reporting audits,
triennial inspections, engagement quality review, and risk assessment to engage
audit committees in areas of common interest.
 Included focused guidance to audit committees in inspection reports, general reports
and audit alerts on using the reports and alerts.
 Engaged the SAG, IAG and other groups, in discussion to further explore areas of
common interest, including an extended discussion at the May 2013 SAG and
October 2014 IAG meetings.
 Engaged small firm auditors through the Forums on Auditing in the Small Business
Environment on the relationship between the auditors and audit committees.
 Monitored certain non-U.S. regulators' respective plans for audit committee outreach
initiatives and results.
 Enhanced participation by Board members and staff in outreach events focused on
audit committee members.
 Updated the PCAOB website to include information tailored for audit committee
members.
 Solicited views and evaluated feedback from certain audit committee members on
how the Board may improve the usefulness of its publicly issued inspection reports.
 Issued a communication to audit committees -- Audit Committee Dialogue -- the first
in a series intended to provide insights from inspections of public company auditors
that may be helpful to audit committee members in their oversight of auditors.
(The Dialogue highlights key areas of recurring concern in PCAOB inspections of
large audit firms as well as certain emerging risks to the audit and provides targeted
questions that committee members may ask their auditors on each topic.)
resulted in new processes and program work, which are now incorporated into the following
enhanced strategies that the Board will further pursue in 2017: Goal 2.C.6 (Extend
Outreach to Audit Committees) and Goal 2.C.5 (Enhance the Usefulness of the PCAOB's
Website as an Effective and Efficient Tool to Communicate with Stakeholders)
25
Major Effort/Priority Project: Integration of Economic Analysis into PCAOB
Programs
Description: Effective integration of economic analysis and tools into the programs of the
PCAOB, including by implementing the staff guidance on economic analysis in standard
setting, fostering informative economic research on audit-related topics, conducting post-
implementation reviews of PCAOB rulemakings, and otherwise using economics to
enhance the PCAOB’s programs and its ability to oversee auditors and further enhance
investor protection
 Established Center for Economic Analysis, which began operations in early 2014, to
study the role and relevance of the audit in capital formation and investor protection,
and to encourage related economic research.
 Hired staff, including financial economists, research fellows, and other specialists, to
work on the Center’s initiatives outlined in its activity plan in furtherance of the
Board’s mission.
 Integrated into the Center all economists already employed by the PCAOB to
enhance coordination among economists.
 Developed the basic infrastructure required for high-quality economic and statistical
analysis.
 Established an Economic Research Fellows Program to conduct economic research
on auditing matters that will inform the oversight activities of the PCAOB and solicited
fellows for the 2014-15, 2015-16, 2016-17 and 2017-18 academic years.
 Established an Inspections Fellowship Program to offer experienced staff from the
PCAOB's Division of Registration and Inspections (“DRI”) the opportunity to interact
with economic research fellows, sharing their knowledge of auditing while learning
and developing new skills.
 Released Staff Guidance on Economic Analysis in PCAOB Standard Setting.
 In conjunction with the Journal of Accounting Research, held three annual economic
conferences on Auditing and Capital Markets.
 Launched an internal seminar series at which academics present research on topics
pertinent to the mission of the PCAOB.
 Released seven research papers authored by Economic Research Fellows.
 Presented to the Board the outlines of a post-implementation review program for the
PCAOB and presented to the Board some preliminary findings from the post-
implementation review of Auditing Standard No. 7, Engagement Quality Review.
 Presented to the Board the Center’s plans to analyze evidence and data related to
financial statement fraud and developed three financial statement fraud case studies.
 Developed a preliminary outline regarding potential goals of randomization and
associated implications for inspections.
 Briefed the Board on a model developed by Center, in collaboration with the Office of
Research and Analysis (“ORA”) and DRI, to identify potentially risky engagements for
inspection.
 Developed performance measures for the Center for inclusion in the PCAOB’s 2015-
2019 Strategic Plan.
26
Status: Actions taken with respect to this effort in 2014, 2015 and 2016 have resulted in
new processes and program work, which are now incorporated into the following enhanced
strategies that the Board will further pursue in 2017: Goal 1.A.5 (Seek Insight on PCAOB
Standard Setting); Goal 1.E.1 (Prepare Economic Analyses for Standard-Setting Initiatives
and Other PCAOB Rulemakings); Goal 1.E.2 (Maintain a Program to Conduct Post-
Implementation Reviews of PCAOB Standards and Rules); Goal 1.E.3 (Enhance the Use of
Economic Analysis and Tools in the PCAOB's Oversight Programs); Goal 1.E.4 (Identify,
Organize, Structure and Analyze Data Required for Economic Research, Standard-Setting
and Other Internal Programmatic Needs); Goal 1.E.5 (Maintain an Inspections Fellowship
Program); Goal 1.E.6 (Foster Economic Research on Topics Relevant to the PCAOB’s
Mission by Maintaining a Fellowship Program, Holding Economic Conferences, and
Maintaining an Internal Seminar Series); Goal 1.E.7 (Analyze Research and Data Related
to Financial Statement Fraud to Inform PCAOB Oversight Activities, including Potential
Standard-Setting)
27
Priority Project: Improvements in the Standard-Setting Program
Description: Reflecting on the PCAOB's experience in setting auditing and related
professional practice standards, identify the actions that worked well (and those that did not)
and refine the PCAOB's processes to achieve the most effective outcomes
 Began evaluation of the PCAOB's standard-setting process
 Established an internal cross-divisional working group to support the review of the
PCAOB standard-setting process
 Engaged a consultant to facilitate review of the PCAOB standard-setting process
 Incorporated new deliberative processes in the standard-setting program in
conjunction with such review
 Enhanced coordination among the PCAOB divisions and offices, including greater
integration of Center staff into standard-setting project teams.
 Began incorporating more research at the outset of a potential project to assess the
need for standard setting and alternatives.
 Improved engagement with the Board and the SEC staff in reaching key decisions on
projects to promote alignment in the direction of the project
 Launched the Project Docket tool to maintain individual Office of Chief Auditor
(“OCA”) project and administrative information and documents in one central location
to facilitate continual Board discussion of individual projects as they progress.
 Began developing standard-setting process maps and related process
documentation, leading to shared understanding of roles and responsibilities.
 Discussed standard-setting process changes with the SAG.
 Began review to assess the role, composition and format of the SAG.
 Completed first annual environmental scan.
Status: Efforts made with respect to this priority in 2015 and 2016 have resulted in the
development of certain new processes and program work and commencement of additional
processes and related tools, which are now incorporated into the following new strategy that
the Board will further pursue in 2017: Goal 1.A.4 (Implement Measures for More Efficient
and Effective Standard Setting)
28
Performance Measures and Indicators
The measures and indicators related to this goal assist in demonstrating the
effectiveness of the PCAOB's oversight, particularly with respect to the PCAOB's
performance in the following areas: (1) conducting inspections in its global network firm,
non-affiliate firm, and broker-dealer firm inspections programs, including issuing
inspection reports and finalizing remediation submissions, (2) registering audit firms,
(3) resolving formal investigations, (4) identifying potential audit failures and other
potential auditor misconduct for investigation, (5) focusing on "higher-priority"
investigations, and (6) enhancing the use of economic analysis throughout the
PCAOB’s programs.
Measure 1-1: Global Network Firm Inspections Program Performance

Relevance of Measure: This measure reflects the PCAOB's performance in
conducting inspections in the PCAOB's global network firm inspections program, which
includes inspections of the largest domestic registered firms and their non-U.S.
affiliates.
Measure 1-1.1: Global Network Firm Inspections Program – Number of
Inspections Conducted and Portions of Issuer Audits Inspected
2015 2016 2017
4
Performance Measure Projected Actual Projected Estimate Projected
Number of Inspections
Conducted:
Domestic 6 6 6 6 6
Non-U.S. 49 52 49 46 42
Portions of Issuer
Audits Inspected:
Domestic 274 274 274 274 274
Non-U.S. 161 161 157 147 140
4
For purposes of this measure, the terms “projected” and “projection” are
synonymous with what are assumed in the 2015, 2016, and 2017 Budgets.
29
Overview of Changes in Inspections Activities:
Number of Inspections Conducted:
Domestic – The number of domestic firms inspected or to be inspected, as well as the

number of portions of issuer audits, for the periods is consistent.
Non-U.S. –The 2015 actual is higher than the 2015 projection because the 2015 actual
includes inspections conducted in jurisdictions where cooperative arrangements were
only established in 2015; the projections do not include inspections in jurisdictions
where the PCAOB does not currently have cooperative arrangements. The 2016
estimate is lower than the 2016 projection because certain planned inspections were
postponed (i) due to the expiration of a cooperative arrangement that was in place, (ii)
to conserve resources in certain cases where the inspection was not mandated in the
current year, or (iii) to conserve resources in certain cases where the inspection of
firms that did not audit any issuers but did play a role in the audit of at least one issuer
were performed on domestic firms rather than non-U.S. firms as had been
contemplated in the projection. The decrease is partially offset by an inspection in a
jurisdiction with a new cooperative agreement established in 2016 and by the
acceleration of the inspection of a firm with an inspection deadline in a future year to
the current year in order to coordinate with the timing of the home country regulator’s
inspection. The 2017 projection is lower than the 2016 projection and 2016 estimate
because of the timing of the cycle of non-U.S. inspections which are performed on a
triennial basis.
Portions of Issuer Audits Inspected:

Domestic – The number of portions of domestic issuer audits inspected or to be
Domestic – The number of portions of domestic issuer audits inspected or to be
inspected for the periods presented are consistent. The PCAOB has observed that this
number of portions of audits allows it to apply its risk-based issuer selection process
effectively, including identifying a sufficient number of engagements that possess
identified risk characteristics to enable the PCAOB to identify potential quality control
deficiencies. At the same time, the PCAOB is able to include individual issuer audits
for inspection that are selected with no specific risk identified.
Non-U.S. – The 2015 actual and projected number of portions of non-U.S. issuer
audits and the 2016 projected number of portions of non-U.S. issuer audits are
generally consistent. The decrease in the number of portions of non-U.S. issuer audits
estimated to be inspected in 2016 as compared to the 2016 projection is primarily due
to the lower number of non-U.S. inspections projected to be conducted in 2016. The
decrease in the portions of non-U.S. issuer audits projected to be conducted in 2017
as compared to 2016 and 2015 is primarily due to the mix of firms and issuers being
inspected in each period.
30
Measure 1-1.2: Global Network Firm Inspections Program – Number of Reports
Issued and Reports Aging
2015 2016 2017
5
Reports Issued:
Domestic 6 5 6 6 7
Non-U.S. 45 41 47 54 39
Reports Aging:
Domestic
Reports aged greater
than 12 months – 1 – 1
outstanding
Non-U.S.
than 12 months 4 6 5 3 5
outstanding6
Reports Issued:
Domestic -- The decrease in the number of actual reports for 2015 reflects one report
on a 2014 inspection that was projected for issuance in 2015 and not issued during the
year. The number of reports projected and estimated for issuance in 2016 is
consistent. The 2017 projection reflects issuance of one outstanding report on a 2016
inspection and six U.S. GNF firm inspection reports for the 2016 inspection year.
Non-U.S. – The increase in the number of non-U.S. reports estimated to be issued in

2016 as compared to the number projected to be issued in 2016 is primarily due to the
issuance of certain aged reports. The decrease in the number of non-U.S. reports
projected for issuance in 2017 as compared to the number of estimated reports for
2016 is due to the timing and nature of certain 2016 inspections, which will likely not be
issued in a twelve month period, and to the decrease in the projected number of
inspections for the period.
5
6
The Division has previously included in this table, as outstanding, reports relating
to inspections of seven non-U.S. firms (six in Hong Kong and one in Singapore) begun
between 2007 and 2011 that remain incomplete as a result of obstacles to the PCAOB’s
review of audit work papers concerning People’s Republic of China operations of the
firms' issuer audit clients. The Division has abandoned consideration of performing
procedures that would be treated as completing those earlier inspections, and the
Division does not intend to recommend that the Board issue reports on the limited work
that was done.
31
Reports Aging:
Domestic – One report was aged in 2015 and in 2016. No reports are expected to be
aged in 2017.
Non-U.S. – The number of non-U.S. reports aged greater than 12 months is generally
consistent throughout all periods.
Measure 1-1.3: Global Network Firm Inspections Program – Number of

Remediation Submissions Finalized7
2015 2016 2017
8
Remediation:
Domestic
Submissions Received 7 7 5 5 5
Submissions Finalized 11 10 7 8 5
Non-U.S.
Remediation:
Domestic – Through 2015, more submissions were finalized than received due to
processing aged submissions along with more recent submissions. In 2016, the
number of submissions received is expected to be consistent with the number of
reports issued in 2015. The estimate of the number of submissions finalized is
expected to exceed the projection due to the net impact of two submissions originally
projected to be finalized in 2015 will be finalized in 2016 and one submission originally
projected to be finalized in 2016 will be finalized in 2017. The 2017 projections are
generally consistent with the report issuance and remediation submission activity of
2016.
Non-U.S. – The 2015 actual results for submissions finalized exceeded the projection
as more aged submissions were finalized. The estimate of submissions finalized in
2016 is generally consistent with the projection. The 2017 projections of submissions
received and finalized are based on the expected timing of the issuance of inspection
reports and the nature of such reports.
7
Submissions Finalized represent remediation recommendations approved by the
Board during the year presented.
8
32
Measure 1-2: Non-Affiliate Firm Inspections Program Performance
conducting inspections in the non-affiliate firm inspections program, which includes
domestic and non-U.S. firms that are not members of the global network structure of
certain of the largest domestic registered firms.
Measure 1-2.1: Non-Affiliate Firm Inspections Program – Number of Inspections
Conducted and Portions of Issuer Audits Inspected
2015 2016 2017
Performance Measure Projected9 Actual Projected Estimate Projected
Conducted:
Domestic 153 146 144 136 134
Non-U.S. 12 11 13 11 13
Portions of Issuer
Audits Inspected:
Domestic 388 361 381 348 367
Non-U.S. 23 18 23 22 23
Number of Inspections Conducted:
Domestic – The downward trend in the number of domestic inspections is primarily

attributable to firm mergers, the withdrawal of registered firms, and firms that remain
registered but have not issued audit opinions since their last inspection. Due to
budget-related considerations, including restrictions on travel, the Division has not
added further inspections to its schedule in 2016.
Non-U.S. – The number of non-U.S. firms inspected is generally consistent for all
periods.
Portions of Issuer Audits Inspected:
Domestic and Non-U.S. – The projected number of portions of issuer audits inspected
directly relates to the number of firms inspected and the size of the issuer audit
practice at each firm projected for inspection. The downward trend in the projected
number of portions of issuer audits to be inspected for 2016 and 2017 as compared to
the 2015 projection is generally consistent with the decrease in the projected number
of inspections conducted.
9
33
Measure 1-2.2: Non-Affiliate Firm Inspections Program – Number of Reports
Issued and Reports Aging
2015 2016
2017
Projected
Performance Measure 10 Actual Projected Estimate Projected
Reports Issued:
Domestic 150 156 143 143 132
Non-U.S. 15 16 11 12 10
Reports Aging:
Domestic
than 12 months – – – – –
outstanding
Non-U.S.
than 12 months 2 – 2 – –
outstanding
Reports Issued:
Domestic and Non-U.S. – Overall, the number of reports issued for all periods
presented is directly related to the number of inspections conducted in the current and
prior period and reflects the results of DRI’s efforts to improve the timeliness of its
inspections reports.
Domestic – In 2015, the PCAOB issued more reports than projected due to the timing
of completion of the underlying inspections. The 2016 estimate is consistent with the
projection. The 2017 projection is generally consistent with the number of inspections
conducted that is estimated for 2016 and projected for 2017.
Non-U.S. – The number of reports issued in the 2016 and 2017 projections as
compared to the 2015 projection is generally consistent with the number of inspections
conducted in the current and prior period.
Reports Aging:
Domestic and Non-U.S. – DRI does not expect any reports aged greater than 12
months outstanding at the end of 2016 or 2017 as a result of DRI's efforts to decrease
its backlog of inspections reports.
10
34
Measure 1-2.3: Non-Affiliate Firm Inspections Program – Number of Remediation
Submissions Finalized11
2015 2016 2017
12
Remediation:
Domestic
Non-U.S.
Remediation:
Domestic – The number of submissions finalized in the 2015 actual results exceeded
the projection due to the processing of aged remediation submissions. The Division
estimated a higher number of submissions finalized in 2016 than was projected based
on continued improvements in the timeliness of remediation determinations. The 2017
projections of submissions received and finalized are based on the expected timing of
the issuance of reports and the nature of such reports.
Non-U.S. – The number of submissions finalized in the 2015 actual results exceeded
the projection due to continued efforts to reduce the backlog of remediation
submissions. The estimate of submissions finalized in 2016 is consistent with the
projection. The number of submissions projected to be finalized in 2017 is a function
of the expected timing of the report issuances in 2016.
11
Submissions Finalized represent remediation recommendations approved by the
Board during the year presented.
12
35
Measure 1-3: Broker-Dealer Firm Inspections Program Performance
conducting inspections in its broker-dealer firm interim inspections program, which
includes firms that audit the financial statements of SEC-registered brokers and
dealers, some of which also audit issuers and therefore, are also subject to inspection
on an annual or triennial basis under the GNF and NAF Inspections Programs.
2015 2016 2017
13
75 75 75 75 75
Conducted
Portions of Broker-
Dealer Audits 115 115 115 115 115
Inspected
Number of Inspections Conducted – The number of inspections to be conducted

during 2016 and 2017 is consistent with 2015, as the number provides consistent
coverage for the interim program and takes into consideration the resources needed
for the further development of a permanent inspection program and related
rulemaking.
Portions of Broker-Dealer Audits Inspected – The portions of broker-dealer audits

to be covered in the inspections during 2016 and 2017 has also remained consistent
with 2015.
13
36
Measure 1-4: Audit Firm Registration Performance
reviewing registration applications.
2015 2016 2017
14
Percentage of
Received Applications
100% 100% 100% 100% 100%
Acted Upon within the
Statutory Time Frame
Overview of Changes in Audit Firm Registration Activity:
In 2015, the PCAOB considered and approved registration applications of 70

accounting firms, including 22 non-U.S. firms, within the statutory time frame. The
PCAOB disapproved two registration applications. Similarly, the 65 registration
applications processed between January 1, 2016 and September 30, 2016, were acted
upon within the statutory time frame. No changes to this rate of action are currently
anticipated. Should there be a significant change in the number of firms seeking to
register; the PCAOB intends to adjust its registration resources accordingly to allow
action to continue to occur on a timely basis.
14
37
Measure 1-5: Timely Resolution of Formal Investigations
Relevance of Measure: This measure identifies the percentage of formal
investigations ordered by the Board that have been resolved within three years of the
opening of the formal investigation.15
Performance Measure 2015 2016 2017
Projected Percentage
Resolved Within 3 Years of 66% 66% 66%
Formal Start of Investigation
Actual Percentage Resolved
Within 3 Years of Formal Start 86% 72%
of Investigation
Overview of Changes in Activities:
In each year between 2012 and 2015, the PCAOB exceeded its performance measure
goal of resolving at least 66% of its formal investigations within three years of opening:
 2012: 75 percent
 2013: 100 percent
 2014: 71 percent
 2015 86 percent
 2016 72 percent
In 2016 and 2017, the Division of Enforcement and Investigations ("DEI") expects to
continue meeting its performance measure of 66% for the year. This projection,
though, will depend on DEI's workload of litigated matters, current investigations,
including the complexity and breadth of those investigations, and whether ongoing
investigations for which disciplinary proceedings are appropriate will be contested. DEI
will also continue to assess whether its target for resolving formal investigations within
three years remains appropriate.
15
This calculation takes into consideration: (1) the institution of disciplinary
proceedings to be litigated; (2) the settlement of instituted disciplinary proceedings;
(3) the deferral of a PCAOB investigation to an investigation of the same alleged auditor
misconduct by the SEC or another regulator; and (4) the closure of the formal
investigation without a recommendation to institute a disciplinary proceeding.
38
Indicator 1-1: Percentage of Formal Investigations Arising within the PCAOB
Relevance of Indicator: This indicator emphasizes the PCAOB's goal of continuing to
draw upon the experience and expertise of internal sources (e.g., inspections and risk
and analysis functions) to identify potential audit failures and other potential auditor
misconduct for investigation. The indicator measures the percentage of new formal
investigations that DEI initiates each year based on internal referrals from DRI and
ORA.
Performance Indicator 2015 2016 2017
Projected Percentage of
Enforcement Cases Arising 50% 50% 50%
within the PCAOB
Actual Percentage of
Enforcement Cases Arising 50% 57%
within the PCAOB
The PCAOB's investigations arise from a number of sources, including inspections of

registered firms, ORA,16 other regulators, public disclosures of restatements and
auditor changes, news reports and confidential tips. In DEI's experience, internal
sources have generated a significant percentage of investigations in which DEI has
identified failures by registered public accounting firms and associated persons to
conduct audits of the required quality. In 2017, DEI intends to continue to look for
opportunities to refine the process through which it receives referrals from DRI.
DEI also will continue to consider carefully external sources of investigations and will
focus on "higher priority" matters. (see Indicator 1-2)
16
Certain referrals from DRI to DEI have originated with referrals from ORA to DRI.
39
Indicator 1-2: Percentage of Formal Investigations Deemed "Higher-Priority"
Relevance of Indicator: This indicator emphasizes the PCAOB's approach to seeking
to maximize its ability to protect investors, achieve appropriate deterrent effects and
improve audit quality by focusing on "higher-priority" investigations. The indicator
measures the percentage of formal investigations that DEI opens each year that are
deemed higher-priority.
"Higher-Priority" 75% 75% 75%
Investigations
Actual Percentage of "Higher-
50% 86%
Priority" Investigations
The Board exercises its enforcement authority strategically, focusing on serious audit
deficiencies and other failures to comply with appropriate laws and standards. "Higher-
priority" investigations involve significant investor protection considerations such as
improving audit quality by strengthening professional skepticism, objectivity and
independence of the audit profession, as well as matters threatening or eroding the
integrity of the Board’s regulatory oversight processes and matters focused on the risks
associated with cross border audits. The higher priority status of a matter may change
depending on the facts collected and the evidence developed during the course of a
formal investigation. In 2017, the PCAOB intends to continue to deploy its resources
strategically while monitoring emerging areas of risk to investors.
40
Measure 1-6: Economic Analysis in Standard-Setting and Other PCAOB
Rulemaking Projects
Relevance of Measure: This measure reflects the PCAOB's performance in ensuring
that regulatory decisions are informed by economic analysis.
Measure 1-6.1: Number of prospective economic analyses developed
2015 2016 2017
Number of prospective
economic analyses in
N/A 8 7 7 7
PCAOB rulemaking
projects
The PCAOB conducts prospective economic analysis to inform standard setting
initiatives and other PCAOB rulemaking projects and to ensure that regulatory decisions,
including whether to adopt new requirements and impose corresponding burdens, are
informed by a rigorous review and analysis of the best information available.
Economic analysis for standard-setting and other PCAOB rulemaking projects includes
assessing the need for rulemaking, understanding the current baseline of activities,
researching relevant academic literature, gathering and analyzing relevant public or
proprietary data, developing and analyzing policy alternatives, and helping the Board
assess the economic impacts of a rule, including the benefits and costs.
As of September 30, 2016, economic analyses were provided for four standard-setting
projects (Reorganization of Auditing Standards, Auditor's Reporting Model, Supervision
of Audits Involving Other Auditors, and Amendments to Limit Board Rule 4003’s Fixed
Periodic Inspection Requirement to Firms That Regularly Issue Audit Reports). It is
estimated that three further economic analyses will be provided in 2016 for the following
in progress standard-setting and rulemaking projects:
 Auditing Accounting Estimates, Including Fair Value Measurements

 The Auditor's Use of the Work of Specialists
 Permanent Inspection Program Related to Audits of Brokers and Dealers
These analyses, when complete and provided to the Board, include quantitative results
that inform the Board’s regulatory decision making.
In 2017, seven further draft economic analyses are expected to be prepared for active
standard-setting initiatives and other PCAOB rulemaking projects.
41
Measure 1-6.2: Number of post-implementation reviews performed
2015 2016 2017
Number of post-
implementation reviews in 1 1 1 1 0
progress
Number of post-
implementation reviews N/A 0 0 0 1
completed
Post-implementation reviews complement the prospective economic analysis that is
developed as part of a rulemaking. Post-implementation reviews provide an
opportunity to look back at significant rulemakings, after a reasonable period of time
has passed, to evaluate the overall effect of a rule or standard and identify potential
areas for improvement. Reviews evaluate whether a rule or standard is accomplishing
its intended purpose, as identified in the rulemaking release; identify, wherever
possible, costs and benefits; and identify unanticipated consequences, either positive
or negative. Over time and with more resources, it is anticipated that post-
implementation reviews will also provide useful information for improving prospective
economic analyses and informing future regulatory decisions.
The PCAOB anticipates concluding its post-implementation review of Auditing Standard

No. 7, Engagement Quality Review and issuing a public report on it in 2017. Upon
completion of this review, the data sets used in the review will be archived to facilitate
their use in future economic analyses and take stock of lessons learned. In addition, in
2017 staff economists will continue planning for potential future post-implementation
reviews of standards and rules currently in development or not yet adopted, including
data that may be needed to perform the reviews. Without additional resources
dedicated to this area, work on post-implementation review will likely be narrower and
slower than it could be.
42
Measure 1-7: Foster Economic Research on Audit-Related Topics
Relevance of Measure: This measure reflects the PCAOB's performance in fostering
high quality publishable economic research on topics that are of direct relevance to the
mission of the PCAOB.
Measure 1-7.1: Economic research fellowship program - Number of research
fellows approved, papers made public and/or published and citation counts
2015 2016 2017
Number of economic
research fellows N/A 4 4 3* 3
approved by the Board
Number of working
papers made public for N/A 5 3 3 3
peer review
Number of research
papers accepted for N/A 0 0 0 1
publication
Cumulative number of
citations to research
papers developed by N/A 0 0 23 35
economic research
fellows
* The terms for two of these fellows expire on December 31, 2016.
The PCAOB maintains an economic research fellowship program that is intended to

generate high quality publishable economic research on topics that are of direct relevance
to the mission of the PCAOB. Among other things, the fellowship program provides a way
for the Board to obtain an outside perspective in analyzing data collected by the PCAOB
through its oversight activities and, through the academic peer review process, allows for
robust and credible analysis of issues of direct interest to the PCAOB.
The first two fellows joined the PCAOB’s Center for Economic Analysis in September
2014. As of September 30, 2016, the Board approved the appointment of three further
Economic Research Fellows (2 in 2015 and 1 in 2016). Through September 30, 2016,
the following working papers have been made public for peer review:
 The Impact of the PCAOB Individual Engagement Inspection Process –
Preliminary Evidence, Daniel Aobdia
 Public Audit Oversight and Reporting Credibility: Evidence from the PCAOB
Inspection Regime, Brandon Gipper, Christian Leuz and Mark Maffett.
 The Validity of Publicly Available Measures of Audit Quality. Evidence from the
PCAOB Inspection Data, Daniel Aobdia.
 What’s in a Name? Reputation and Monitoring in the Audit Market, Somdutta Basu
and Suraj Shekhar
 Does the Organization and Culture of the Largest Audit Firms Influence their Audit
Quality and Efficiency?, Daniel Aobdia
43
 Does Engagement Partner Expertise Matter? Evidence from the U.S. Operations of
the Big 4 Audit Firms, Daniel Aobdia, Saad Siddiqui and Andres Vinelli.
 Do Auditors Correctly Identify and Assess Internal Control Deficiencies? Evidence
from the PCAOB Data, Daniel Aobdia, Preeti Choudhary, and Gil Sadka.
It is expected that at least one further paper will be made public for peer review in 2016
and three in 2017.
The research topics of economic research fellows, including a description of any

nonpublic data sets required for research, are presented to the Board for approval and
research papers are reviewed to confirm that the topic of the paper is consistent with the
researcher’s proposal. That review does not, however, encompass an evaluation of the
conclusions reached by researchers.
44
Measure 1-7.2: Economic Conference - Number of submissions and papers
presented, number of academics attending, overall satisfaction of attendees with
the conference content, and CPE credit issued
2015 2016 2017
Performance Measure
Projected Actual Projected Estimate Projected
Number of submissions N/A 70 70 83 80
Number of papers
N/A 8 8 6 6
presented
Total number of
N/A 198 198 198 198
attendees
Number of academics
N/A 120 120 120 120
attending
Total number of non-
PCAOB, non-academic N/A 10 10 10 10
attendees
Percentage of U.S.-
based academics
attending from
institutions classified as
“research universities
N/A 74% 74% 74% 74%
with very high research
activity” in the Carnegie
Classification of
Institutions of Higher
Education
Percentage of attendees
that responded the N/A 31% 30% 30% 30%
feedback survey
Percentage of feedback
survey respondents that
were satisfied or very N/A 87% 80% 80% 80%
satisfied with the
conference content
Hours of CPE credit
issued to participants N/A 426 426 426 426
requesting CPE credit
In conjunction with the Journal of Accounting Research, the PCAOB holds an annual
economic conference to promote academic research on the economic impact of auditing
and audit regulation on capital markets. Among other things, the conference signals the
PCAOB’s interest in high quality research, informs the PCAOB’s analytical capabilities,
and provides a mechanism to engage a wide range of research-minded academics in
discussion on topics directly relevant to the PCAOB.
74% of U.S.-based academics who attended the 2015 conference came from institutions
classified as “research universities with very high research activity” in the Carnegie
Classification of Institutions of Higher Education. The conference is also well attended by
editors of leading accounting and economics journals. Such attendance is important in
45
raising the profile of the conference in the academic community, attracting high quality
papers in the future, and enhancing interest in auditing research. In 2017, the Center
intends to maintain the size of the conference at a similar level to 2015 and 2016.
Measure 1-7.3: Internal Seminar Series - Number of seminars and attendees and CPE
credit issued
2015 2016 2017
Number of seminars N/A 7 6 6 6
Total number of
N/A 459 393 604 600
attendees
Hours of CPE credit
issued to participants N/A 173 173 225 270
requesting CPE
Internal PCAOB seminars are forums for scholars present research on issues directly
related to the PCAOB’s oversight activities and discuss those issues with PCAOB staff and
Board members. The interactions provide PCAOB staff and Board members the
opportunity to interact with leading researchers and remain abreast of, and incorporate in
the PCAOB’s work, the latest analytical advances and research findings. This helps
ensure that the PCAOB benefits from, and keeps pace with, the best and most current
academic thinking. In 2015, the Center organized seven seminars on a range of topics. Six
further seminars are planned for 2016 (five held as of September 30, 2016).
Attendance at the 2016 seminars increased significantly from 2015. Six further seminars
are planned for 2017.
46
The measures and indicators related to this goal assist in demonstrating the
constructiveness of the PCAOB's impact, particularly with respect to the PCAOB's
outreach efforts, including the Forums on Auditing in the Small Business Environment
and Forums for Auditors of Broker-Dealers, and its progress in establishing
relationships with non-U.S. regulators.
Measure 2-1: Feedback from Forums on Auditing in the Small Business

Environment
Relevance of Measure: This measure shows the extent to which participants in
Forums believe that Forum sessions meet the stated learning objectives by a score of
4.0 or higher (on a scale of 1.0-5.0), as rated by attendees.
Small Business Forum
90% 90% 90%
Sessions Rated 4.0 or higher
out of 5.0
Actual Percentage of Small
Business Forum Sessions 100%
Rated 4.0 or higher out of 5.0
Number of survey
457
respondents
Number of Attendees 681
The results of this measure are used to shape the content and focus of future Forums.
In 2015, the PCAOB held six Forums, which followed a format similar to that of 2014,
but included a panel discussion on auditing accounting estimates including fair value
measurements. A total of 681 people attended these Forums; 457 responded to the
survey, with 100% rating the Forums 4.0 or higher meeting the target of a minimum of
90% of its sessions during 2015.
The PCAOB plans to hold seven Forums in 2016, following a format similar to that of
prior years but will include a panel discussion on monitoring audit quality and to maintain
its target rating of 4.0 or higher for a minimum of 90% of its sessions during the year. A
total of 582 people attended the six Forums held through October 31, 2016; 423
responded to the survey with 100% rating the Forums 4.0 or higher meeting the target of
a minimum of 90% of its sessions during 2016.
The PCAOB plans to hold two live Forums in 2017, following a format similar to that of
prior years, and also plans to explore one webinar in this area. Again, it plans to
maintain its target rating of 4.0 or higher for a minimum of 90% of its sessions during the
year.
47
Measure 2-2: Feedback from Forums for Auditors of Broker-Dealers
Relevance of Measure: This measure shows the extent to which participants in
Forums for Auditors of Broker-Dealers believe that Forum sessions meet the stated
learning objectives by a score of 4.0 or higher (on a scale of 1.0-5.0), as rated by
attendees.
Small Business Forum
85% 85% 90%
Sessions Rated 4.0 or higher
out of 5.0
Actual Percentage of Small
Business Forum Sessions 100%
Rated 4.0 or higher out of 5.0
Number of survey
489
respondents
Number of Attendees 689
The results of this measure are used to shape the content and focus of future Forums
which are primarily targeted at auditors of smaller registered broker-dealers.
The PCAOB held four Forums for Auditors of Broker-Dealers in 2015 following a format
similar to that of prior years. A total of 689 people attended these Forums and 489
responded to the survey, with 100% rating the Forum 4.0 or higher.
In 2015, the PCAOB also held two webcasts for auditors of broker-dealers. The content
of these webcasts closely reflected the content of the DRI and OCA portions of the 2014
Forums for Auditors of Smaller Broker-Dealers. A total of 518 people signed into the
webcasts and 279 of these people completed the evaluations of the webcasts, with
100% rating the webcasts 4.0 or higher.
In 2016, the PCAOB plans to hold five Forums for Auditors of Broker-Dealers following a
format similar to that of prior years. The PCAOB plans to continue to maintain its target
rating of 4.0 or higher for a minimum of 85% of its session during 2016. A total of 582
people attended the four Forums held through October 31, 2016; 393 responded to the
survey with 100% rating the Forums 4.0 or higher meeting the target of a minimum of
85% of its sessions during 2016.
In 2016, the PCAOB also held one webcast on inspections of auditors of broker-dealers.
A total of 624 people signed into the webcasts and 191 of these people completed the
evaluations of the webcasts, with 95% rating the webcast 4.0 or higher.
In 2017, the PCAOB plans to hold two in person Forums for Auditors of Broker-Dealers
following a format similar to that of prior years and also plans to explore holding one
webinar in this area. The PCAOB plans to continue to maintain its target rating of 4.0 or
higher but will target this rating for a minimum of 90% of its sessions during 2017. This
is an increase from the 85% minimum of prior years.
48
Measure 2-3: Progress in Establishing and Maintaining Relationships with Audit
Oversight Bodies or Other Relevant Non-U.S. Regulators in Jurisdictions Where
the PCAOB Conducts Inspections or Should Inspect
Relevance of Measure: This measure shows the cumulative number of jurisdictions
with which the PCAOB has either established or maintained contact, a working
relationship or a cooperative arrangement with non-U.S. regulators in those non-U.S.
jurisdictions where the PCAOB conducts inspections or should inspect
Establish or maintain working relationship with non-U.S. regulators in jurisdictions
with which the PCAOB has concluded a cooperative arrangement
Projected Number of
27 27 26
Jurisdictions
Actual Number of Jurisdictions 21
Establish or maintain contact or working relationship with non-U.S. regulators in
jurisdictions with which the PCAOB has not concluded a cooperative arrangement,
but such an arrangement is not necessary for conducting PCAOB inspections
Projected Number of
25 26 26
Jurisdictions
Establish or maintain working relationship with non-U.S. regulators in jurisdictions
requiring a cooperative arrangement for conducting PCAOB inspections but where
such cooperative arrangement has not yet been concluded
Projected Number of
3 3 1
Jurisdictions
Under the Act and PCAOB rules, non-U.S. public accounting firms that audit or play a
substantial role in the audit of U.S. issuers, brokers and dealers are subject to oversight
by the PCAOB. Non-U.S. registered firms are subject to PCAOB inspections and
enforcement in the same manner as U.S. firms. The PCAOB develops relationships with
non-U.S. regulators to facilitate its inspections, investigations and exchange of
confidential information with regard to firms that fall within the jurisdiction of the PCAOB
and the foreign regulator. The PCAOB often enters into formal cooperative
arrangements with non-U.S. audit regulators in order to minimize administrative burdens
and potential legal or other conflicts that non-U.S. firms may face in their home
countries. In many cases, cooperation under these cooperative arrangements includes
the PCAOB regularly carrying out inspections jointly with the home-country regulator.
Because of the position taken by certain non-U.S. authorities, however, the PCAOB
continues to face varying obstacles to conducting inspections of registered firms in
certain foreign jurisdictions.
In 2015, the PCAOB concluded cooperative arrangements with Greece, Hungary and
Luxembourg, bringing the total number of cooperative arrangements reached with non-
U.S. auditor oversight authorities to 21. In seven EU member states where the PCAOB
was required to inspect (Austria, Belgium, Czech Republic, Ireland, Italy, Poland and
Portugal), the PCAOB remained unable to conduct inspections of registered firms in 2015
49
due to asserted restrictions under local law. The PCAOB also remained unable to
inspect the U.S.-related audit work and practices of PCAOB-registered firms in China
and, to the extent their audit clients have operations in mainland China, Hong Kong.
In 2015 and 2016, the PCAOB engaged in discussions with the EU member states and
the European Commission on renewal of the 2013 adequacy decision which was to
expire on July 31, 2016. On July 14, 2016, the European Commission approved a new
adequacy decision with respect to the PCAOB for a six-year term ending on July 31,
2022. As a result of the renewal of the adequacy decision as well as certain
organizational restructuring or other changes to various EU member state audit oversight
regimes resulting from their implementation of new EU audit reform legislation, which
took effect in June 2016, the PCAOB has been negotiating new or amended cooperative
arrangements with various EU member states with which a cooperative arrangement had
already been concluded and was in force. In certain other EU member states, the
existing cooperative arrangements continued in force and did not require amendment or
replacement. Also in 2016, the PCAOB continued negotiations with audit oversight
authorities with EU member states where the PCAOB has been unable to conduct
inspections of registered firms due to asserted restrictions under local law and the lack of
a bilateral cooperative arrangement. Finally, as a result of SEC approval on July 11,
2016 of the Board’s amendments to its inspection frequency rules relating to inspections
of “substantial role only” firms and firms that issue audit reports but then go two
consecutive years without issuing an audit report, it was determined that the
PCAOB would not need to inspect, at least for the time being, in two of the seven
previously mentioned member states and so efforts to negotiate cooperative
arrangements in those EU member states were suspended. In 2016, the PCAOB signed
new or amended cooperative arrangements with Finland, Germany, Luxembourg and
Norway
In 2016, the PCAOB continued to face obstacles to conducting required inspections in

China and Hong Kong. However, with regard to China, the PCAOB made progress with
Chinese authorities in 2016 in laying the foundation for a long-term agreement allowing
the PCAOB to inspect firms based in mainland China. With regard to Hong Kong, the
PCAOB also continued discussions with Chinese authorities regarding the PCAOB’s
ability to inspect Hong Kong-based firms and their audits of issuers based in mainland
China.
In 2017, the PCAOB will continue its efforts to conclude cooperative arrangements with
the remaining few jurisdictions in the European Union and elsewhere where the PCAOB
still faces obstacles to conducting inspections or with jurisdictions that seek cooperative
arrangements to facilitate the exchange of information.
50
Measure 2-4: International Institute on Audit Regulation Feedback
Relevance of Measure: This measure shows the percentage of participants who agree
that the Institute was effective in meeting its objectives based on participants' responses
to a survey distributed at the Institute.
Overall, the program addressed the current issues facing audit oversight globally
Projected percentage of
Institute participants that 90% 90% 90%
agree
Actual percentage of Institute
98%
participants that agree
Overall, the program promoted discussion among our diverse group of attendees
Projected percentage of
Institute participants that 90% 90% 90%
agree
Actual percentage of Institute
79%
participants that agree
Number of survey
respondents to the above 52
measures
Number of participants 93
The PCAOB hosts the International Institute on Audit Regulation in order to promote
dialogue among independent audit regulators and other organizations on global issues,
risks, and trends affecting audit oversight. The PCAOB hosted the ninth Institute on
December 2-4, 2015. With the significant development of audit oversight globally,
including the proliferation of independent audit oversight bodies, since the PCAOB first
hosted the Institute in 2007, the PCAOB changed the format of the Institute beginning in
2015 to focus less of the program on the structure and operations of the PCAOB and
more on current and emerging issues in audit regulation. The PCAOB will host the tenth
Institute on December 12-14, 2016.
51
Indicator 2-1: Number of Participants and Jurisdictions that Attend the
International Institute on Audit Regulation
Relevance of Indicator: This indicator shows the amount of interest by other
jurisdictions in the International Institute on Audit Regulation.
Projected Number of
70 70 70
Participants
Actual Number of
93
Participants
Projected Number of
30 30 30
Jurisdictions
Actual Number of
34
Jurisdictions
The PCAOB hosted the ninth International Institute for non-U.S. regulators and
government officials on December 2-4, 2015, with attendance of 93 representatives from
34 jurisdictions and five international organizations. With the significant development of
audit oversight globally, including the proliferation of independent audit oversight bodies,
since the PCAOB first hosted the Institute in 2007, the PCAOB changed the format of the
Institute beginning in 2015 to focus the full program on current and emerging issues in
audit regulation, which was well-received by the participants who attended the 2015
Institute. The Institute also offers the PCAOB the opportunity to hold numerous bilateral
meetings on the margins of the formal program with attendees from jurisdictions where
such bilateral meetings would be timely. The PCAOB will host the tenth Institute on
December 12-14, 2016 and plans to host the eleventh Institute in the second half of
2017.
52

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Public Company Accounting Oversight Board Strategic Plan:: NOVEMBER 18, 2016

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Public Company Accounting Oversight Board

Improving the Quality of the Audit for the Protection and

NOVEMBER 18, 2016

Updates to the Plan

 identifying more effective ways to engage investors and others in PCAOB

 further improving our standard-setting program, including further development,

 developing the approach to inspections of broker-dealer auditors under a

 continuing to identify ways to further automate, streamline and improve our

 pursuing a recently commenced diversity and inclusion project to foster a culture

With respect to advancing our standard-setting agenda to further protect investors, we

(i) registration of accounting firms;

(ii) inspections of registered firms' audits and quality control systems;

(iii) establishment of auditing and related attestation, quality control, ethics,

We analyze information obtained in our inspections, investigations, and other sources,

Goal 3: Dedicated People: Establish a collaborative workplace culture that

 Public Interest and Stewardship: We are committed to protecting investors

 Excellence, Integrity and Fairness: We are committed to quality and

 Teamwork and Diversity: We are committed to maintaining a collaborative

 Continue to Enhance Technological Capabilities to Support

 Implement Measures for More Efficient and Effective Standard

 Seek Insight on PCAOB Standard Setting. Facilitate evidence

 Engage Effectively with Other Standard Setters and Regulators.

 Contribute to Audit Issues Debate. Contribute to the debate on issues

B. Identify and respond to audit opinions issued without reasonable basis,

 Analyze Root Causes of Quality Control and Audit Deficiencies and

 Use Disciplinary Authority to Protect Investors and Achieve

 Use Risk Analysis to Guide Inspections and Investigations. Use risk

C. Further develop an infrastructure to carry out oversight authority relating

 Continue to Conduct Inspections under the Interim Inspection

 Respond to Audit and Attestation Deficiencies. Take appropriate

D. Reinforce and extend the emerging cross-border audit oversight regime,

 Follow Through on the Outcomes of the U.S.-China Strategic and

 Participate as Leaders in IFIAR. Facilitate the sharing among

 Coordinate Cross-Border Information Sharing, Investigations,

 Maintain a Program to Conduct Post-Implementation Reviews of

 Enhance the Use of Economic Analysis and Tools in the PCAOB's

 Identify, Organize, Structure and Analyze Data Required for

 Maintain an Inspections Fellowship Program. Maintain an inspection

 Foster Economic Research on Topics Relevant to the PCAOB’s

 Analyze Research and Data Related to Financial Statement Fraud to

 Improve Transparency in the Audit Process including the Audit

 Monitor and Support the Implementation of the Auditor Reporting

 Analyze and Report on the Firm Business Model. Continue to analyze

B. Enhance auditors' independence, objectivity, and professional skepticism

C. Improve transparency related to the PCAOB's activities and engage

 Communicate the Benefits of Public Enforcement Proceedings.

 Provide PCAOB Information and Related Training for Auditors of

 Expand Outreach through Targeted Webcasts. Use webcasts to

 Enhance the Usefulness of the PCAOB's Website as an Effective and

 Host and Participate in Programs for Other Regulators. Continue to

 Recruit from Diverse Backgrounds. Recruit experienced and

 Further Develop Highly-Skilled Staff. Enhance the PCAOB's training

 Engage Staff. Continue to develop and implement appropriate employee

 Develop a Human Capital Strategic Plan. Develop a robust Human

 Strengthen Operational and Reporting Processes. Continue to

 Evaluate and Modernize Information Systems that Support Core

 Continue to Enhance Employee Safety. Continue to enhance employee

 Enhance and Maintain the PCAOB’s Business Continuity Planning

 Continue to Enhance the PCAOB's Ability to Respond to