Each year, the PCAOB inspects audits performed by the largest accounting firms in the world and issues a report to each of those firms outlining the areas in which those audits were deficient. And each year, GAAP Dynamics publishes an eBook that focuses on the results of those inspections. Why? We published this eBook to help auditors:
- Learn from findings in recent PCAOB inspection reports
- Improve audit training
- Prevent recurring audit deficiencies
- Strengthen the quality of their audits
Our eBook examines the findings of the 11 annually inspected firms’ inspection reports that were available as of date the book was published. While the book notes that inspection findings are down, the main causes of audit deficiencies remain unchanged. Our book explores the 5 main areas of inspection findings, including:
- Auditing internal control over financial reporting (ICFR)
- Assessing and responding to the risks of material misstatement
- Auditing accounting estimates
- Auditing fair value measurements and disclosures
- Performing audit sampling procedures
Need another amazing addition to this year’s version of the eBook to entice you to download? We’ve partnered with ADIGEO Consulting, a consulting firm focusing on improving audit quality and helping firms respond to criticisms by regulators and plaintiffs. ADIGEO Consulting was founded by Helen Munter, former Director of Registrations and Inspections at the PCAOB and John Fiebig, former Senior Deputy Director and program leader for the PCAOB’s Global Network Firm program.
Want a sneak peek of what they’re bringing to the table in this year’s eBook? Take a quick read through their foreword and make sure you download the FREE eBook to read through the insights provided by both GAAP Dynamics and ADIGEO Consulting in each of the five areas mentioned above and make sure your audits pass their annual, triennial, or other PCAOB inspection!
While it can be one of the most stressful times in an auditor’s career, engagement inspections are a valuable part of how the PCAOB carries out its mission. As noted throughout this eBook, inspections have identified several deficiencies in the audits of public companies. The PCAOB and its inspectors use the results of its inspections to drive firms and their audit professionals to improve in all aspects of how they perform audits. Firms have made significant improvements in their methodologies and their systems of quality control in the last 15 years. Many of these improvements have come from firms performing a robust root cause analysis of the underlying reasons for deficiencies, which has led to meaningful changes in how they approach their top-down risk-based audits. We are proud to have been a part of that progress in the 14 years that we were leaders in the Inspection Division at the PCAOB.
For the first time since its inception, the PCAOB has five new board members. Through their speeches and communications, the Board has expressed a renewed focus on evaluating firms’ systems of quality control through the inspections process. While this has always been a part of the inspection of a firm, an increased focus on a firm’s system of quality control will also mean that there will be an increased expectation of the role an effective system of quality control will play in performing quality audits. We applaud the board on this initiative and look forward to hearing from them all the areas of best practices they have determined. Even with this new focus, you should still expect inspectors to dig deep into your audit work papers – which is why understanding the deficiencies discussed in this eBook will continue to be part of the auditor’s journey toward improving audit quality.
ADIGEO Consulting is proud to partner with GAAP Dynamics in providing our insights to the key areas discussed in this eBook. It allows us to use our experience from years of leading PCAOB inspections and initiatives to help auditors improve and to continue our focus on improving audit quality.
This post is published to spread the love of GAAP and provided for informational purposes only. Although we are CPAs and have made every effort to ensure the factual accuracy of the post as of the date it was published, we are not responsible for your ultimate compliance with accounting or auditing standards and you agree not to hold us responsible for such. In addition, we take no responsibility for updating old posts, but may do so from time to time.