If a person was going to describe the 2010 PCAOB inspection results, you might hear things like, "didn't meet expectations" or "downright embarrassing" or "an abomination" or they may just make Hans Hoogervorst's favorite hand gesture. Simply, they weren't so good. The good news is there's no place to go but up. The bad news is "up" may have to wait another year.
Most of the Public Company Accounting Oversight Board's 2011 inspection reports of the biggest firms have yet to be issued, but they will show a continued "spike" in audits found to have serious problems, PCAOB member Jeanette Franzel said in a speech in Chicago on Thursday. In some cases, Ms. Franzel said, the board's inspectors found that auditors gave their clients a clean bill of health even though the audit work wasn't completely or properly conducted, or the company's financial statements were contradicted by other evidence.