My friend, Francine McKenna, writes about the CPA firms and related matters at The Dig. She frequently calls out the firms for their missteps, but she is also quick to write about issues at the regulators that are supposed to oversee them.
I recommend her site and following her on Twitter (@retheauditors).
Board members, executives, and practitioners should be concerned when there is evidence that the audits performed by the firms are deficient.
The Public Company Oversight Board (PCAOB) inspects a sample of audits every year and has consistently found fault with the firms’ performance.
They have recently shared the reports from their inspections of 2020 audits by several firms, including:
Even though EY celebrated what they thought were excellent inspection results, I don’t believe they had reason to do so. 15.38% of their audits that were inspected had serious deficiencies.
The PCAOB inspectors will occasionally go so far as to assert that an audit opinion was incorrect, although they did not say that of any of the four firms’ 2020 audits that they inspected. However, they did identify multiple audits with at least one serious deficiency – when the auditor’s workpapers did not indicate sufficient evidence was obtained for the audit opinion.
I have summarized the areas where serious deficiencies…
