September 17, 2021

audit deficiencies

Here Are Two Contenders For the Biggest Turd of a 2019 PCAOB Inspection Report

Significantly screwing up half of your audits inspected by the PCAOB won’t get your firm included in the pantheon of worst PCAOB inspection reports of all time. RSM US beat that handily in 2017. BDO USA has had audit failure rates of 74% (2014), 67% (2016), and 65% (2013). Grant Thornton did a horrible job […]

Grant Thornton Auditors Are Just Showing Off Now

It’s fair to say Grant Thornton auditors are no longer on the struggle bus. From 2010 to 2015, the Purple Rose of Chicago had an average audit failure rate of 44% in its PCAOB inspection reports during that time frame, including a whopping 65% worth of screw-ups in the firm’s 2012 report, which gave GT […]

Thumbs down BDO LLP

Those Who Know, Know BDO … Is Consistently Terrible At Auditing

Here’s a number of the day for ya: 50.7%. That is the average failure rate of BDO USA audits in PCAOB inspection reports from 2010 to its most recent 2019 report, in which PCAOB inspectors found significant errors in 42% of audits reviewed. Public accounting firms that have been historically bad at auditing, like Grant […]

How Did RSM US Fare On Its Latest Auditing Report Card From the PCAOB?

Not too long ago, RSM US had one of the worst PCAOB inspection reports we’ve ever seen. How bad was RSM’s audit quality? R-E-A-L bad. The number in the red is … well … not a good number. That would be the number of audits the PCAOB inspected that had problems so big that the […]

KPMG Rocks signs held by a woman in a KPMG shirt

LOL, PwC: For Once, KPMG Doesn’t Have the Worst Audit Failure Rate Among the Big 4

Because it’s #TriviaTuesday, here are a couple of questions regarding PCAOB inspection reports: When was the last time KPMG did not have the worst audit deficiency rate among the Big 4? When was the last time KPMG had a lower deficiency rate than PwC? The answer to the first question is 2013’s inspection reports, when […]

EY Isn’t Botching As Many Audits These Days, According to Latest PCAOB Inspection Report

The Big 4 firm behind the most boring TV ad during Super Bowl LV last night has shown improvements in audit quality in its last two PCAOB inspection reports. Some may say that EY having a former PCAOB member on its Independent Audit Quality Committee is why the number of EY audits with deficiencies is […]

Deloitte Is Doing a Much Better Job Lately of Not Screwing Up Audits

While PwC waits with bated breath for the PCAOB to release the firm’s 2020 inspection report so it can presumably take an audit quality victory lap around the other Big 4 firms, Deloitte can at least say it has had the lowest audit failure rates among the Big 4 the past three years. For the […]

For Now, PwC’s Audit Quality Stinks

In Footnotes last Friday, we highlighted a recent Accounting Today article about PwC finally taking audit quality seriously what measures PwC is taking to improve audit quality. In the article, Wes Bricker, PwC’s U.S. assurance leader and former SEC chief accountant, dropped a bomb—a Bricker bomb, if you will—about the most recent PCAOB inspections cycle: […]

RSM US’s 2018 PCAOB Inspection Report Is a Lot Less Deplorable Than the Last One

When you talk about the worst PCAOB inspection reports of all time, the 2017 one for RSM US has to be in the conversation. During that inspection cycle, the PCAOB found significant problems in 11 of the 15 RSM audits selected, for a dubious deficiency rate of 73%. The other day, the newly branded PCAOB […]

KPMG Rocks signs held by a woman in a KPMG shirt

At Least KPMG Won’t Have the Worst 2018 PCAOB Inspection Report

We’ve finally reached the end of the six-pack of 2018 inspection reports released by the PCAOB on June 1. And we saved our favorite four-letter Big 4 firm for last. Among the Big 4, KPMG’s inspection reports have been the most abysmal. Since 2010, Deloitte, PwC, and EY have not had an audit deficiency rate […]

BDO USA Auditors Are Still Riding On the Struggle Bus, Latest PCAOB Inspection Report Reveals

People who know, know BDO USA has had some of the suckiest audit inspection reports recently among the firms that are annually inspected by the PCAOB. From 2012 to 2017, an average of 59% of BDO audits inspected by the PCAOB had significant errors. Yeesh. Things were sorta looking better when the PCAOB released BDO’s […]

EY’s Auditing Is Not As Sad As It Used to Be, Per 2018 PCAOB Inspection Report

It’s kinda sad, really, that we don’t bat an eye when the top audit firms in the world, the ones that are supposed to be the gold standard of the profession, still significantly screw up one-fourth of their audits of public companies that are inspected by the PCAOB. Why? Because the number of audits with […]

PwC’s Latest PCAOB Inspection Report Is Fairly Unspectacular, Part II

Let’s keep plowing through this pile of 2018 PCAOB inspection reports and take a look at how PwC auditors did during the 2017 inspection season. PwC auditors haven’t had a lot of great press lately: we had the Mattel accounting cover-up; Brandon Sprankle spectacularly violating independence rules, resulting in PwC being fined $7.9 million by […]

Grant Thornton’s 2018 PCAOB Inspection Report Is Not As Good As 2017’s, Not As Bad As 2012’s

Monday morning we got an email that the PCAOB had dropped six 2018 inspection reports on us—the Big 4 firms, Grant Thornton, and BDO USA—so everyone’s favorite audit cops could show off their new snazzy inspection report format. This might have been the largest one-day release of reports of firms that are inspected annually by […]

Deloitte’s 2018 PCAOB Inspection Report Shows They’ve Gotten a Lot Better At This Thing Called Auditing

So the PCAOB did a thing today. Everyone’s favorite audit regulator released the 2018 inspection reports for the Big 4, Grant Thornton, and BDO USA this morning in a “new user-friendly format.” And they’re actually pretty sleek-looking and informative. A couple years ago, Caleb called PCAOB inspection reports “beach reads” because executive summaries had been […]

Let’s Give a Big Hand to BDO For Not Having the Worst 2017 PCAOB Inspection Report

The PCAOB released the 2017 inspection report for BDO USA at the end of June, and while the firm should still hang its collective heads in shame for there being deficiencies found in nine of the 23 audits inspected in 2016, for a 39% failure rate, there are a few positive things that Bravo Delta […]

PCAOB Releases Teaser Trailer of 2018 Inspection Findings

Testing internal control over financial reporting, assessing risks of material misstatement, and auditing accounting estimates (you know, the yoozh) continue to trip up auditors, according to the PCAOB, which offered a sneak preview of what we can expect in 2018 audit firm inspection reports. More than 160 U.S. audit firms were inspected by the PCAOB […]

PwC’s Latest PCAOB Inspection Report Is Fairly Unspectacular

So far among the top seven firms in the U.S., the PCAOB has released 2017 inspections reports for five: one was god-awful (RSM US), one was horrible (KPMG), one was pretty, dare I say, good (Deloitte), and one was dynamic (Grant Thornton). PwC’s inspection report would probably fall on the “good” side (if you consider […]

Audit Deficiencies Got Much Worse Among Big 4 Firms in Canada

I came across an article on the site Canadian Accountant this morning that said Canada’s audit regulator, the Canadian Public Accountability Board, recently issued its annual inspection results for 2018, finding significant audit deficiencies increased from 15 in 2017 to 34 in 2018. Thirty-four total significant deficiency findings might not seem that bad compared to […]

Deloitte sign

Deloitte’s 2017 PCAOB Inspection Report Is Pretty Not Shitty

You know, when I sat down to start writing this, I contemplated some clever headline, perhaps something about a veritable smorgasbord of audit screw-ups, but then I was like, you know what, nah. We should recognize that Deloitte has posted its lowest audit deficiency rate ever, which is something worth applauding even if the fuck-up rate […]

If the PCAOB Thinks Firms are So Deficient, Can We Rely on Audits or Not?

A nearly 40% "deficiency" rate for the big firms according to the PCAOB is news to no one (at least no one around here) but let's look at this post by Emily Chasan in CFO Journal for WSJ anyway: The Big Number: 37.5% That’s the proportion of audits by large accounting firms found to have […]

The PCAOB Has Conveniently Released 2011 Inspection Reports For Deloitte, Grant Thornton and Ernst & Young the Friday Before Christmas

Oh I bet you guys think you're slick for this one! Thanks so much for ruining my Doomsday. So here's what we've got. Let's start with Deloitte: The PCAOB identified a few particular deficiencies it didn't like: The inspection team considered certain of the deficiencies that it observed to be audit failures. Specifically, certain of […]

PCAOB Sick of Audit Firms Playing Dumb with ICFR Standard

The PCAOB is still chugging along spitting out reports about how sucky the firms are at doing audits, this time releasing their observations from the 2010 inspections of domestic annually inspected firms regarding deficiencies in audits of internal control – which, in fewer words, is a dig at how crappily the firms are testing internal […]

Just in Case There Are Audit Committee Members Out There Slacking on the Job, The PCAOB Has Released a Guide to Its Inspections That Should Catch You Up on Things

Are you a member of an audit committee that's been phoning it in? Or are you a newbie that's feeling upstaged by your fellow audit committee buds that are the so-called financial experts? Maybe you're skeptical of the words coming out of your audit firm's piehole(s) but you're not sure how to respond? Fear not! […]

The Number of Financial Statement Audit Deficiencies Is Blowing Up

So says an analysis of PCAOB inspection report data: The Survey of Fair Value Audit Deficiencies was released Wednesday by Acuitas, Inc., an Atlanta CPA firm that practices litigation and business valuation services. The analysis found that fair value measurement and impairment deficiencies accounted for 52 percent of all the audit deficiencies cited in the […]