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January 28, 2023

PCAOB Unsure About Motives Behind Audit Firms’ Fancy New Thingamajigs

The Big 4 has been attempting to bring sexy back to auditing for awhile now, with leaders talking about innovation this and technology that, data this and 100% testing that.

And that's cool, auditing needed the confidence boost, since advisory's been strutting around getting all the attention for the last decade. So yeah, we've noticed and everything sounds good even if audit teams will mostly be androids in a couple decades.

The PCAOB has noticed too and while they're impressed with the technological advances, at least one person is a little skeptical about what's really going on here. Here are some remarks that board member Steven Harris gave at the New York State Society of CPAs SEC Conference yesterday:

My hope and expectation is that these technological tools will make the audit more efficient and incisive and allow auditors to devote more time to higher risk areas. Whether that will happen is unclear.

If these tools lead to improvement in audit quality, that is good for investors. But if the tools are used purely to further client relationships by providing deeper data analysis for management, some could argue that once again audit firms will perceive the audit function merely as a springboard to more lucrative non-audit engagements.

Try to resist your impulses, people.

[PCAOB]

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