PCAOB’s Second Review of Smaller Firms Reveals Some Improvement in Audits
A report released Feb. 25 by the Public Company Accounting Oversight Board shows a decrease in significant audit performance deficiencies among smaller audit firms, or those that audited 100 or fewer public companies.
“We continue to be concerned about the level and types of significant deficiencies in the triennial firm inspections, and we hope to see further improvement in the percentage of findings and the remediation efforts among firms,” board member Jeanette M. Franzel said during a Feb. 25 conference call with reporters.
The new report summarizes inspection observations identified from 2007 through 2010 of smaller U.S. audit firms, those that are inspected at least once every three years. The firms are referred to as “triennially inspected firms” by the PCAOB. The findings were compared to inspection observations found from 2004 through 2006.
The nine largest audit firms in the country, including Deloitte LLP, Ernst & Young LLP, KPMG LLP, and PricewaterhouseCoopers LLP, are inspected annually by the PCAOB and not included in this report.
By Che Odom
The full PCAOB report is available at http://pcaobus.org/Inspections/Documents/02252013_Release_2013_001.pdf.