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.
In a speech last week, Board Member Jeanette Franzel (CPA, CIA, CMA, CGFM) warned that the 2011 inspection reports will look similar to the wreck that was last year's inspection reports:
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.
And so far this seems to be the case. Last month, KPMG's 2011 inspection report was consistently shrug-worthy with its 2010 inspection report. Maybe we've completely misunderestimated the PCAOB's sense of humor. I mean, the fact that PCAOB inspection reports appear to be following "same as last year" just has to be a parody on the profession as a whole, doesn't it? Let's just run with it. Bravo, PCAOB.
