All PCAOB articles – Page 19
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Blog
PCAOB practice alert finds rash of doctored audit files
The PCAOB this week published a staff audit practice alert emphasizing that improperly altering audit documentation in connection with a PCAOB inspection or investigation violates PCAOB rules requiring cooperation with its oversight activities and can result in disciplinary actions with severe consequences. “Evidence identified in connection with certain recent oversight ...
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Blog
PCAOB previews improvements from 2015 inspection cycle
A staff inspection brief issued this month by the PCAOB showed that preliminary counts from inspections performed in 2015 suggest the number of audit deficiencies for the largest firms has fallen, while deficiencies at smaller firms is, overall, high. The PCAOB brief stated that inspectors observed “indications of improved audit ...
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Blog
PCAOB proposes new rules for supervising outside audit work
The PCAOB is changing the rules on how audit firms must manage the outside auditors they hire to help with audit work. The board has proposed for public comment a new standard and amendments to existing standards to direct auditors on how they must evaluate and supervise the work of ...
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Article
Regulators explore what’s wrong with audit supervision
Image: Audit supervision in general and auditing firm staffing levels and management structure in particular are under scrutiny as an old question surfaces: How can audit firms improve the quality of their own systems? “There is this inference that we keep finding engagements where we think the auditing standards aren’t ...
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Blog
PCAOB prepares new rule on outside auditors, reviews EQR standard
The PCAOB has scheduled an open meeting to consider a proposed new requirment around firms relying on others outside the principal firm to assist with audit work. The new proposal would address the lead auditor’s responsibilities with respect to those other auditors from outside the principal audit firm who participate ...
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Blog
PCAOB delivers searing inspection report to BDO USA
BDO USA received a scathing 2014 inspection report from the PCAOB. Among the 23 audits the board selected for inspection, 17, or 74%, had issues, a record high rate among major firms. Of the 17 busted audits, 15 contained problems in both the audit of financial statements and the audit ...
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Blog
PCAOB reports compliance with communications standard
Image: The PCAOB said it is “encouraged” that most firms have complied with Auditing Standard No. 16, a standard governing communication with audit committees, as the board found no failures to comply in 93 percent of the audits reviewed in the 2014 inspection cycle. “The communication between an audit firm ...
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ArticleSEC fines energy company $300K over rubber stamp internal controls
Image: A recent SEC action against a company for maintaining insufficient internal controls signals a new effort from federal authorities to hold companies to higher standards when it comes to internal control material weaknesses and significant deficiencies. “This is a case that doesn’t have a punchline,” says Tom Sporkin, a ...
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Blog
Study links audit staffing to audit quality
Recent academic research from professors at the University of Alabama and Louisiana State University finds where audit engagement workload is high, companies have significantly higher abnormal discretionary accruals, are more likely to restate earnings, and are less likely to get a going concern opinion even when signs of distress are ...
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Blog
SEC approves PCAOB budget; Doty promises new proposals soon
Image: With majority support from the SEC—all two of them, that is—the PCAOB has finalized its 2016 budget with a 12-percent increase in fees charged to public companies to support it. Only SEC Chair Mary Jo White and Commissioner Kara Stein supported the PCAOB’s $257.7 million budget for the current ...
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Blog
Audit regulators globally call on big firms for faster improvement
Audit regulators globally say they aren’t satisfied with inspection results the past few years and are working with the six largest global audit networks—Deloitte, EY, KPMG, PwC, BDO, and Grant Thornton—to step up the pace of improvement. The International Forum of Independent Audit Regulators, a global association of audit regulators ...
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Blog
SEC seeks comment on rule requiring naming engagement partners
The SEC is gathering comment on recent PCAOB rules that require audit firms to complete a new filing providing the name of engagement partners on public company audit engagements. PCAOB rules are subject to SEC approval before they can become final, which is why the Commission wants to hear remarks ...
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Blog
Lawyers see varied approaches to related-party rule
Image: Attorneys at law firm Dorsey observing compliance with the new audit standard on related-party transactions say they are seeing some companies being asked to make no changes to their controls and procedures while others face new audit demands to expand their questionnaires to directors and officers. “The required changes ...
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Blog
Where Audits Go Awry, Internal Control Audit is Faulty Too, Analysis Shows
Image: Big 4 firms exhibited problems in 35 percent of all audit engagements inspected in 2014, and a whopping 84 percent of those deficient audits involved problems with internal control over financial reporting, according to an analysis by Dan Goelzer, a former member and acting chair of the PCAOB. The ...
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Blog
CAQ Chooses Path Forward on Identifying Quality Indicators
The Center for Audit Quality, which represents auditors, has issued a new report on its effort to pilot test its approach to defining audit quality indicators and its suggested path forward on how to identify the most effective way to define and then measure audit quality. The CAQ says it ...
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Blog
PCAOB Sanctions China-Based Firm for Stalling Investigation
With its negotiations over regulatory access to China stalled, the PCAOB has settled a disciplinary order against Hong Kong audit firm PKF HK and three employees accused of failing to cooperate with an investigation. The board has revoked the registration of the company and censured the firm, contending that PKF ...
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Blog
Going Concerns Fall in 2014 in “Mixed Bag” of Results
According to the latest data from Audit Analytics, the number of audit opinions that included a question from auditors regarding whether the company could remain in business another year appears to have fallen in 2014 from 2013. Based on this estimation, the research firm says 2014 going-concern opinions finished out ...
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Blog
CPAs Launch Research to Push Data Analytics in Audit
Image: The AICPA and Rutgers Business School haved formed a data analytics research initiative to demonstrate how the use of data analytics can advance the public accounting profession. According to Rutgers professor Miklos Vasarhelyi, the initiative’s two shared goals are “to examine how audit objectives might be achieved more effectively ...
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Article
Regulators Suggest It’s Time to Double Down on Internal Controls
Image: After nearly a year of moderating corporate gripes of excessive auditing driven by regulatory inspections, regulators say the answer is for companies to double down on their controls and use a little more muscle with their auditors. “Preparers are on the back end of the compliance funnel,” said Kevin ...
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Blog
PCAOB’s Top Inspector Shares Plans for 2016
Image: When audit inspectors begin work on 2015 financial statements, they will be looking closely at the audit of internal controls, accounting estimates, misstatement risks. Those are the key themes from the 2014 financial statement inspections, said Helen Munter, director of inspections for the PCAOB. “Audit committees might wish to ...