All PCAOB articles – Page 20
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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 ...
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Blog
PCAOB Adopts Form to Name Engagement Partner, Others in Audit
Finally achieving the path of least resistance after multiple prior attempts, the Public Company Accounting Oversight Board has approved a rule requiring audit firms to identify engagement partners and others outside the firm who contribute to public company audits.
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Blog
PCAOB Experiments With Random Inspections, Data Analysis
Image: The PCAOB has opened a project to study inspection results statistically and to consider whether the board should allocate some inspection resources to randomly selected audits. Chairman James Doty: “Could some randomization help us make better inferences about how pervasive audit deficiencies may be? Could some random selection increase ...
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Blog
Regulators Continue Full Throttle on Internal Controls
Image: SEC Chief Accountant Jim Schnurr is encouraging preparers to communicate more with auditors and consider that tensions might be escalating because their controls aren’t up to snuff. “The ICFR issues identified by the PCAOB may not be just a problem of audit execution,” Schnurr said. “Rather, they may, at ...
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Blog
PwC Reports on Efforts to Raise Audit Quality
Image: PwC has issued a report to answer questions about what it is doing to better address regulatory demands for better audits. The company is investing in technology, developing talent, and adjusting its audit approach to meet rising expectations. “We understand the importance of maintaining our focus on delivering quality, ...
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Blog
PCAOB Nears New Rule on Naming Engagement Partners
Image: PCAOB Chairman James Doty believes the board will be in a position “very soon” to finalize a rule requiring audit firms to submit a new form, Form AP, to the PCAOB naming engagement partners and other accounting firms that contribute to the final audit opinion for public companies. Doty ...
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Blog
PCAOB Explores Tension Over Internal Control Audits
Image: The PCAOB apparently is taking seriously complaints that its inspection process is driving unnecessary audit work. At a recent conference, PCAOB member Jay Hanson said the board has studied its inspection process to assure that inspections are not imposing new audit requirements. Still, he said, “we cannot rule out” ...
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Blog
Inspection Results Vary Even Within Global Networks, PCAOB Member Says
Image: Global affiliates of the six largest accounting firms turn in strikingly different inspection results compared with their U.S. affiliates. PCAOB research shows. Deloitte U.S., for example, has been reducing the rate of deficiencies in its inspections from 2011 through 2013, but Deloitte’s global affiliates have turned in much higher ...
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Blog
Early 2015 Inspection Results Hint to Some Improvements
Image: PCAOB Chairman Jim Doty met recently with FASB’s Standing Advisory Group to provide an early look at 2015 inspection results. “Overall early results indicate that the number of deficiencies identified in the engagements inspected appears to be declining from the 2014 inspections results,” he said. “These results vary for ...
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Blog
PCAOB Delivers Harsh Inspection Findings to KPMG
The PCAOB’s 2014 inspection report for KPMG found fault with 28 of 52 audits selected for inspection, marking the first time errors have been found in more than half of the audits selected at a Big 4 firm. KPMG’s rate has crept upward every year since 2009 when the PCAOB ...
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Blog
PCAOB Admonishes BDO USA for Quality Control Lapses
The PCAOB has republished BDO USA’s 2011 and 2012 inspection reports to criticize the firm’s inadequate response to inspection findings in those years around audit quality control problems. The inspectors found too many cases where auditors accepted management representations without appropriately considering contradictory evidence, contributing to many of the audit ...
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Blog
SEC Expects Year-End Disclosures on Revenue Rule Plans
Image: SEC Chief Accountant Jim Schnurr has advised audit committees to get involved in overseeing implementation of the new revenue standard, which takes effect in 2018. Schnurr said that should include disclosures about how the standard will affect financial statements. “We expect the level of these disclosures to increase and ...
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Blog
SEC Expects Year-End Disclosures on Revenue Rule Plans
Image: SEC Chief Accountant Jim Schnurr has advised audit committees to get involved in overseeing implementation of the new revenue standard, which takes effect in 2018. Schnurr said that should include disclosures about how the standard will affect financial statements. “We expect the level of these disclosures to increase and ...
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Article
How to Worry About M&A Accounting in This Year’s Audit
Image: Merger activity is booming this year. That means plenty of scrutiny from audit firms in the coming year-end audit, since the firms themselves are under PCAOB pressure to be more skeptical of fair value, provisional figures in financial statements, and the like—all crucial to accounting for M&A deals. “Audit ...
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Blog
PCAOB Issues Crowe Horwath Inspection Report
Image: The PCAOB found fault with five of 14 audits inspected at Crowe Horwath in 2014, a slight improvement for the firm over its 2013 results. The board’s 2014 inspection report revealed an audit deficiency rate of 36 percent, compared with 38 percent in 2013 and 50 percent in 2012. ...
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Article
Hosting a Related-Party Transaction About to Get Much Harder
Image: Companies preparing year-end financial disclosures, beware: Auditors will be poring over related-party transactions to make sure those parties don’t get too wild. The new Audit Standard 18 pushed auditors to be more skeptical about transactions, so expect them to push you (and your audit committee) to be more diligent ...
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Article
Hosting a Related-Party Transaction About to Get Much Harder
Image: Companies preparing year-end financial disclosures, beware: Auditors will be poring over related-party transactions to make sure those parties don’t get too wild. The new Audit Standard 18 pushed auditors to be more skeptical about transactions, so expect them to push you (and your audit committee) to be more diligent ...
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Blog
PCAOB Issues Fresh Warnings on Risk
Image: The PCAOB has issued a report describing the deficiencies it sees in how audit firms implement and comply with risk assessment standards. “Because risk assessment underlies the entire audit process, it is critical that audit firms address these findings of weaknesses in compliance with the risk assessment standards,” said ...
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Article
Year-End Audits: Start Prepping for the Pain
As public companies and their external auditors gear up for the year-end audit cycle, it will likely include some familiar, yet still uncomfortable, conversations. Be ready for close looks at internal control over financial reporting, accounting estimates, and related-party transactions. “You can rest assured auditors are going to be really ...
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Blog
CAQ Echoes Regulatory Warnings for Year-End Audits
Image: The Center for Audit Quality has issued an alert to auditors advising where they should focus their audit attention this year. First up is professional skepticism and internal control over financial reporting, followed closely by risk assessments, cyber-security, revenue recognition, and related parties. “These alerts reflect the public company ...