NACD - National Association of Corporate Directors

Episode 3 | Skepticism and the External Auditor

Date: October 22, 2012
Series: Skepticism Series to Combat Fraud

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License to Access and Use


Before accessing a digital download on this website, National Association of Corporate Directors ("NACD") requires your affirmative assent to the following terms and conditions:

License: NACD hereby grants you a nonexclusive, non-transferable, non-sublicensable, limited license to view, save and print one (1) copy of each digital download (the "Works") for personal, noncommercial purposes, contingent upon your adherence to the following terms and conditions:

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Restrictions: You may not reproduce, copy, modify, publish, transmit, participate in the transfer or sale of, create derivative works from, distribute, publicly display, or in any other way exploit the Works, in whole or in part, other than as expressly set forth herein. You may not remove or alter any copyright or trademark notices referenced in the Works.

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I have read this agreement carefully and understand its terms.

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License to Access and Use


Before accessing a digital download on this website, National Association of Corporate Directors ("NACD") requires your affirmative assent to the following terms and conditions:

License: NACD hereby grants you a nonexclusive, non-transferable, non-sublicensable, limited license to view, save and print one (1) copy of each digital download (the "Works") for personal, noncommercial purposes, contingent upon your adherence to the following terms and conditions:

Ownership of Intellectual Property: At all times NACD will retain all right, title and interest in and to the Works, including without limitation, copyrights, trademarks and any other rights and interests. This license does not convey to you, your business, or your employer any right, title or interest in the Works, nor in any portion of the Works, but only constitutes a limited license to use the Works as specified herein.

Restrictions: You may not reproduce, copy, modify, publish, transmit, participate in the transfer or sale of, create derivative works from, distribute, publicly display, or in any other way exploit the Works, in whole or in part, other than as expressly set forth herein. You may not remove or alter any copyright or trademark notices referenced in the Works.

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Event Details

When what you are hearing doesn’t match what you are seeing, it’s time to be skeptical. But how do you use this incisive skill in a constructive way? Hear first-hand from the foremost practitioners of this useful skill—auditors. Experienced audit committee chair Michele Hooper interviews Cindy Fornelli, executive director of the Center for Audit Quality, and Greg Weaver, chairman and CEO of Deloitte & Touche LLP.

In their lively exchange, the panelists focus on the uniquely challenging role of those who audit financial statements, which are built on a series of accounting estimates regarding transactions that can be extremely complex. So gathering audit evidence is a multi-step process to get to the core of the estimate or transaction. As they exercise professional judgment—from defining the right problem to documenting their findings—auditors approach their task with skepticism, a “questioning mind and a critical assessment of the audit evidence,” along with “presumptive doubt.” In exercising skepticism, auditors and others need to overcome natural human judgment biases such as “confirmation,” “overconfidence,” “availability,” and “anchoring.”

No matter what your role in financial reporting you can benefit from hearing what this highly experienced panel has to say about skepticism—the ultimate secret behind effective audits.

Speaker Spotlight

Cindy Fornelli is the executive director for the Center for Audit Quality (CAQ). The CAQ was founded to serve investors, public company auditors, and the markets. Ms. Fornelli is responsible for carrying out the mission and vision of the Center's governing board. She is as a member of the SEC Historical Society’s board of advisors’ class of 2012. Previously, Ms. Fornelli was the regulatory and conflicts management executive at Bank of America.

Michele J. Hooper serves on the NACD board of directors and on the boards of PPG Industries, Inc. and UnitedHealth Group. She chairs the audit committee for PPG, and the Nominating and Governance committee for UnitedHealth Group. She is also co-chair of the CAQ Working Group focused for the Deterrence and Detection of Financial Reporting Fraud. Ms. Hooper previously was a board member of Target Corporation, AstraZeneca PLC, DaVita Corporation, and Seagram Company Ltd. She is President and CEO of The Directors’ Council, which specializes in corporate board of director recruitment.

Gregory G. Weaver is chairman and CEO of Deloitte & Touche LLP, the U.S. accounting, auditing and risk advisory subsidiary of Deloitte LLP. With more than 38 years of experience at Deloitte, including 27 years as a partner, Greg has held a variety of senior leadership roles within Deloitte. Most recently, Weaver was a member of the board of directors of Deloitte LLP, serving on its Governance Committee and Partner Earning and Benefits Committee, and was the chairman of the Elected Leaders Committee. He is also a former member of the Deloitte Touche Tohmatsu Limited (DTTL) Global Assurance Leadership team. Weaver previously served as the chairman and CEO of Deloitte & Touche from 2001 to 2005.

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