October 23, 2021

PCAOB

The PCAOB Has Added Some Interesting New Language to Inspection Reports

While we were ragging on EY yesterday for taking it up the AS5 from the PCAOB, we happened to notice some interesting new language in the inspection report. Now, this is not surprising as the PCAOB clarifies itself often, but let's see what you think about this: Certain of the deficiencies identified were of such […]

Audit Partners Will Definitely Be Named, We Just Don’t Know Where or How

This from ProPublica: In a letter dated August 15, Jeff Mahoney, the general counsel for the Council of Institutional Investors, a nonprofit that represents investment organizations with more than $3 trillion in assets under management, wrote, "to express our surprise and disappointment in the report earlier this week in the New York Times that the […]

According to This, Audit Partner Naming Is No Longer on the PCAOB’s To Do List

We found an interesting bit in a DealBook piece about Mary Jo White's impotent SEC we felt would be important to share with you: On yet another front, the S.E.C. is embroiled in a quiet battle with the Public Company Accounting Oversight Board, the accounting industry regulator created after the Enron-era scandals. The accounting board […]

The PCAOB Hopes To Check Audit Partner Naming Off Its To Do List This Year

The PCAOB has plenty to do, not least of which protecting the investing public and making sure those pesky auditors check the right boxes in their pursuit of passable audits. But now we have an idea what, specifically, they're working on through the end of the year. Forgive the screenshot, cutting and pasting from a […]

PCAOB Settles With PwC Partner Who Screwed Up the ArthroCare Audit

Let this case serve as a lesson to all partners in charge: if you don't do good audits, you will be bankrupted and sent to prison for criminally negligent auditing. Oh wait, no you won't. Carry on: The Public Company Accounting Oversight Board today announced a settled disciplinary order against Randall A. Stone, CPA, of […]

Auditors Tell PCAOB They’d Rather Not Report on the Already Reported On

Back in August of 2013, the PCAOB floated a few new auditing standards that would bring major changes to audit reports: The Auditor's Report on an Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, which would supersede portions of AU sec. 508, Reports on Audited Financial Statements, and The Auditor's Responsibilities Regarding […]

Grant Thornton Fails to Take Up the PCAOB’s Offer to Get Better at Auditing

The good news for Grant Thornton is that they managed to take remedial actions related to their 2010 inspection report and addressed criticisms to the satisfaction of the PCAOB. Cheers!  The bad news is that the same cannot be said for their 2008 and 2009 reports. The quality control remediation process is basically a way […]

PCAOB Adopts Auditing Standard No. 18: Crony Disclosures

Let us welcome into the world a new auditing standard:

Some Companies Unsure About This New COSO Internal Control Framework

Some dates are not set in stone, like the day of the week I decide to clean the cat fountain or change my sheets. Others, like the day I need to pay my rent and the fiscal year-end on or after December 15, 2014 are not so variable. When it comes to COSO's new 2013 […]

PCAOB: Audit Firms Missing the Point of Auditing

Audit firms are still having some trouble pleasing the audit overlords at the PCAOB — particularly with Auditing Standard No. 5. ICFR is the new WTF, though the PCAOB sees audit firms making progress. Unfortunately, the firms are also kinda missing the point of this whole exercise. Compliance Week has the details: The next round […]

The PCAOB Has a Flickr and It’s Everything You’d Expect it to Be

Earlier today when I was pulling a press release off my fifth most visited website after GC, the Daily Mail, Facebook, and perhaps a tube that shall remain unnamed, I noticed the fancy little icons at the top of the page letting me know that the PCAOB has a Flickr account. Perplexed, I immediately gchatted […]

The PCAOB Is Looking For a Few Good SAGs

Full press release is below as we don't care enough about this to spend an hour rewriting it: Washington, DC, May 1, 2014 — The Public Company Accounting Oversight Board is soliciting nominations for its Standing Advisory Group (SAG) for the 2015-2017 three-year term. The deadline for submissions is June 30, 2014. The Board is […]

Per PCAOB Board Member, Facebook Will Not Sufficiently Prepare You As an Auditor

"For new accountants, the focus on documentation can be a difficult transition — the world of texting, Facebook postings, and tweeting may not fully prepare you. And, of course, communication skills are important even beyond the accountant's documentation of audit procedures. Being able to express yourself effectively is key to your relationships with your co-workers […]

If China Won’t Play, the PCAOB Will Find Someone Else to Play With

Keep holding out, China, the PCAOB don't need to check your stinkin' work anyway: Washington, DC, March 31, 2014 — The Public Company Accounting Oversight Board today announced that it has entered into a cooperative agreement with the Supervisory Board of Public Accountants (RN) of Sweden relating to the oversight of audit firms subject to […]

Save the Date: PCAOB April Public Meeting on the Auditor’s Reporting Model Proposal

The PCAOB is preparing for its April 2-3 public meeting this week, and while I really wanted an excuse to spend two days in Washington trolling the PCAOB IRL, I decided catching the webcast from the comfort of my Lovesac in my pajamas was a much better decision. The panelists aren't much to write home […]

One Guy at the PCAOB Thinks the PCAOB Should Consider Its Language

Aha! Pointy-headed professors aren't the only ones who think the PCAOB's use of the term "audit failure" is totally dramatic and possibly unnecessary. From the JofA: The PCAOB’s use of the term “audit failure” in its inspection reports of audit firms appears to have caused confusion and misunderstanding about the severity of inspection findings among […]

Per the PCAOB, Being Registered with the PCAOB Isn’t the Same as Being Scrutinized by the PCAOB

For some of you, being subject to PCAOB inspection is easily the worst part of your miserable life. For others, simply registering with the PCAOB can lend the kind of automatic credibility shitty restaurants get by slapping a "People Love Us on Yelp" sticker in the window. Imagine boasting you are "PCAOB-registered" without never having […]

Is the PCAOB’s “Audit Failure” Rate Really a Little Dramatic?

Here's the deal. Last week, Mark Peecher and Ira Solomon published an opinion piece on CFO.com titled PCAOB’s ‘Audit Failure’ Rate Is Highly Suspect. Just so we know these guys might have some idea what they are talking about, Mark teaches accounting at the University of Illinois Urbana-Champaign and Ira is dean of the A. […]

The PCAOB’s Valentine’s Day Gift to Us is More Time to Comment on Partner Naming

Compliance Week has our friendly reminder that if you have something to say about audit partner naming, you better speak now or forever hold your peace: As preparers wrap up their year-end financial reports, they'll have a few extra weeks to make their views known on a proposal to begin naming engagement partners in the […]

Forget Auditor Rotation, the PCAOB Has Bigger Fish to Fry in China

As you know, I sat through the SEC Open Meeting webcast yesterday just to catch the copious number of thank yous, Doty giving the prepared remarks I already had, and the conclusion we all knew the SEC would come to, which was approving the 2014 PCAOB budget. BOR-ING. Well out of that meeting, everyone seemed […]

Duh of the Day: One in Three Audits Fail, Per the PCAOB

Lodi dodi, we likes to party, we don't cause trouble, we don't bother nobody. This comes from Emily Chasan via CFO Journal: More than one in three audits inspected by the U.S. government’s audit watchdog were so deficient the auditors shouldn’t have signed off, an official said this week. Why do I feel like we […]

Let’s Give Up on the PCAOB But Not on Regulating Auditors

Ed. note: Paul Gillis Ph.D, CPA is a Professor of Accounting at the Guanghua School of Management, Peking University in Beijing, China and co-director of its IMBA program. He is a former member of the PCAOB Standing Advisory Group, he also writes the China Accounting Blog and you can follow him on Twitter. He's not pointy-headed, […]

The PCAOB is a (Necessary) Pain in the Ass(ets)

Ed. note: this is unconventional even for us as we usually don't hand over the soapbox to trolls but in this case, it seemed fitting as Big4Veteran has been waiting YEARS for us to publish the last thing he submitted to us while graciously throwing down his "wisdom" in the comment section just as long. […]

How Regulators Are Like the Food Stamps of Professional Services

The other night I was listening to Episode #2 of the Thrivecast (which I highly recommend) with Jason Blumer and Greg Kyte. At one point in the podcast they were talking about innovation in the accounting profession and Jason made a comment that struck me: "The PCAOB is new and they have a slew of regulations. Cool. I got a new […]

The PCAOB Is Grateful To The PCAOB For the PCAOB’s Work

Jim Peterson has subjected himself to not one but two viewings of the PCAOB's December 4 meeting, so that alone makes him a hero because ain't nobody got time for that. But on his second viewing, the delirium kicked in and he started counting how many times the PCAOB thanked the PCAOB for the PCAOB's […]

Here Are Some Viable Alternatives To Naming Audit Partners in Reports

Let no one say our comment section is pointless, offensive, and about as valuable as the stuff I scoop out of litter boxes every day. Would something so worthless come up with a gem like this? Who the lead audit partner is on the audit of a publicly traded company is irrelevant – he or […]

Per Jim Doty, The Firms Think PCAOB Inspections Improve Audit Quality

Let's discuss. This just came out of his mouth not 5 minutes ago. Doty: "the firms tell us that they believe PCAOB inspection has improved audit quality." #aicpaSEC — Adrienne Gonzalez (@adrigonzo) December 9, 2013

Save the Date: AICPA Conference on Current SEC and PCAOB Developments

As Going Concern's official Washington correspondent (read: the one who lived in an awesome condo in the DC hood), it's up to me to head home next week to cover the AICPA Conference on Current SEC and PCAOB Developments from December 9 – 11. I know, you're as excited as I am about this JUST […]

If A Tree Falls at a PCAOB Public Meeting About Partner Naming and No One Cares, Does It Make a Sound?

"The day after Thanksgiving is known in America as Black Friday – the opening of the pre-Christmas shopping season, when merchants launch midnight sales and dubious oddball discounts, and hordes of turkey-stuffed consumers storm the malls like barbarians at the gates. This year the 4th of December should go down in Washington as Dull Grey […]

The PCAOB Is Trying to Give Itself a Small Raise

And by "small" I mean $12.8 million. The Public Company Accounting Oversight Board today approved its 2014 fiscal-year budget of approximately $258.4 million and its 2013-2017 strategic plan. The budget is $12.8 million, or 5 percent, above the Board's 2013 budget of $245.6 million. The Board also approved its strategic plan for 2013-2017 to serve […]

If You’re Not Doing Anything Next Monday, Hang With the PCAOB As They Hammer Out Their Budget

I was totally going to go but, um, I have to wash my cat's hair that day: PCAOB to Consider 2014 Budget and Strategic Plan Washington, DC, Nov. 19, 2013 The Public Company Accounting Oversight Board has scheduled an Open Meeting for Monday, Nov. 25, at 3 p.m., to consider adoption of the PCAOB budget […]

The PCAOB Has Added “Information For Audit Committees” To Its Website

Audit committees play a vital role in the capital markets' investor protection framework through their oversight of the audit engagement and the company’s financial reporting process. The Sarbanes-Oxley Act of 2002, as amended, enhanced the scope of the oversight role played by the public company audit committee, by, among other things, making audit committees of listed […]

The PCAOB’s Disciplinary Action Against Deloitte Is the Latest Embarrassment for the Auditing Profession

Late yesterday we learned about the latest wrist slap coming from the PCAOB for an audit firm. Deloitte was fined $2 million for allowing a suspended partner, Christopher Anderson, "to become an 'associated person' of Deloitte during the period of the suspension."  I could go on but it's quite simple: there's nothing to like about this […]

The AICPA Couldn’t Give Broker Dealer Audit Standards a Thumbs Up Without a Pat on Their Own Back

THE MAN HAS SPOKEN. This is the official statement from Barry Melancon in response to the PCAOB's proposed broker-dealer audit standards: “The AICPA is committed to activities that enhance audit quality and has been a leader assisting practitioners in achieving that goal. “We have been consistent in our position that brokers and dealers should be […]

BDO Forgot to Ask Investors What They Thought About the PCAOB’s Proposed Auditor Report Changes

They managed to round up a lot of their (and their competitors') clients though! According to a new study by BDO USA, LLP, one of the nation’s leading accounting and consulting organizations, less than one-third (27%) of public company board members believe the Public Company Accounting Oversight Board's (PCAOB) proposed changes to the annual auditor's report […]

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 Is at Your Service During the Shutdown

The PCAOB is not affected by the government shutdown. Inspections and other activities will remain on schedule. — PCAOB_News (@PCAOB_News) October 1, 2013 For those wanting a little more clarification, the PCAOB is NOT part of the federal budget. Per the Board's website:  The PCAOB is funded primarily by assessments collected from public companies and […]

More PCAOB Comment Letters Need to Complain About the Issuer-pay Model

If you're like us, you've been anxiously awaiting comment letters on the PCAOB's auditor reporting model proposal. There's nothing better than self-righteous firms penning letters filled with thinly-veiled condescension. Plus, the U.S. Chamber owes us all an honest effort after phoning in their initial response.    So far none of the major accounting firms, the AICPA, CAQ, […]

Just in Time for the Holidays: A PCAOB Auditor ID Proposal

Auditors are traditionally quiet participants in a company’s final annual report, signing their firm’s name on a form letter with a simple pass or fail grade. But a push to gain more insight into their process is growing globally, meeting demands for more disclosure from both regulators and investors. The Public Company Accounting Oversight Board, the […]

PwC and KPMG Inspection Reports Make Us Wonder: Are Shoddy Big 4 Audits Here to Stay?

Have we mentioned how much we enjoy the PCAOB releasing inspection reports and/or making big announcements the week leading up to a major holiday? No? Oh yes, it's right up there with root canals and saddle sores. But it's their labor of love so we'll share the news with you. Today, the Board released the 2012 […]

Ernst & Young’s PCAOB Inspection Results Look Even Worse in Chart Form

Last week, we discussed just how bad EY's auditing had gotten from a PCAOB inspection report perspective. And with a failure rate of 48% we can all say, "That sucks, EY," with the utmost confidence.  Yet, nothing in the PCAOB inspection report or anything we wrote last Tuesday sums things quite like this chart from the […]

Here’s What You Need to Know About the PCAOB’s Proposed Makeover to the Auditor’s Report

This morning the PCAOB held their open meeting to discuss "Proposed Auditing Standards Regarding the Auditor’s Report and the Auditor’s Responsibilities Regarding Other Information." PCAOB Chairman James Doty called it a "watershed moment for the auditing in the United States." And yeah, I suppose it is. I mean, the auditor's opinion hasn't changed in 70 […]

The Auditors’ Auditors Got a Clean Audit Opinion From Their Auditors

The PCAOB posted their 2012 annual report to its website today and it's filled with all kinds of interesting information. It's the end of a Monday, so we only managed to pull a few examples: There were nine audit firms inspected in 2012 that had more than 100 public company audit clients in 2011. They […]

Ernst & Young’s PCAOB Inspection Report Results Managed to Get Much Worse

Just yesterday we ran down the 2011 performance of the eight largest public accounting firms in this fair land. And just as soon as people were starting to get their knickers in a twist, the PCAOB released its 2012 inspection report for the firm formerly known as Ernst & Young. And yes, the firm's error […]

Here’s How the Top Eight Audit Firms Ranked in PCAOB Inspection Error Rate

This got by us for some reason, but Compliance Week noted Crowe Horwath's atrocious error rate in its 2011 PCAOB inspection reports was by far the worst among the eight largest audit firms. Here's the ranking of firms, from best to worst, and their error rate: 1. KPMG — 22.6%2. EY — 35.7%3. BDO — 39.1%4. Grant […]

The Ideas in This Revamped Auditor’s Report Are Great Because Audit Firms Will Hate Most (if Not All) of Them

Michael Rapoport at the Wall Street Journal has a great article today that gives us a good idea of what kind of information would be contained in a useful auditor's report since we all know that, in its current form, it's more or less useless. This is not hyperbole, since a study entitled "Improving the Auditor's Report" from 2011 […]

The Big 4’s Stranglehold on the Audit Market Is Worse Than You Thought

In a speech entitled "Accountability: Protecting Investors, the Public Interest and Prosperity," PCAOB member Jeanette Franzel shares some numbers:   Currently, about 2,360 firms are registered with the PCAOB, including about 915 non-U.S. firms located in 85 jurisdictions.   Not all PCAOB-registered firms regularly issue audit reports for issuers, but we inspect those that do […]

China Ready to Turn Over Audit Workpapers for Some Company at Some Point

The U.S. Securities and Exchange Commission has been struggling to obtain papers from China to investigate possible accounting fraud at dozens of Chinese companies listed on U.S. stock exchanges. China has resisted for years turning over documents because of state-secrets and sovereignty concerns. The China Securities Regulatory Commission (CSRC) is now ready to transfer audit papers […]

Maybe Now You’ll Take the Opposition to Auditor Rotation Seriously

It's fair to say that accounting firms are conservative organizations. That is, they prefer that things in their world remain more or less the same and when extremely rare and unforeseen events occur that mandate change, it be carried out with as little disruption as possible and on their terms. NBD, right?   The PCAOB, […]

What’s in a (Big 4 Partner’s) Name? Maybe a Lot

On Friday, Francine McKenna provided a perfect example of what investors could learn about the audit partners for public companies should the PCAOB start requiring the naming of names.  Francine, through her sources, was able to confirm that Linda McGowan was the partner for MF Global — something widely known amongst regulators, and lawyers involved […]

Deal Between PCAOB, Chinese Is a Lose-Lose Situation

Yes, the PCAOB got a lousy deal by putting Jim Doty's name on the Memo of Understanding with China's Securities Regulatory Commission and Ministry of Finance, but Professor Paul Gillis writes in the Wall Street Journal that the Chinese don't have any room to talk, either: Without inspections, investors can't trust Chinese audits. Investors in Chinese […]

Deloitte Is the Audit Firm That Has Had the Most Trouble in China… By Far

Cruising around el Twittero this morning, we came across something interesting shared by Francine McKenna: Which auditor has most China fraud problems? Deloitte by a landslide. RT @chinajinrong: @retheauditors tradingfloor.com/posts/china-fi… — Francine McKenna (@retheauditors) May 29, 2013 This post by Fredrik Oqvist, founder of China RAI, has a table that shows which audit firms have had […]

Deloitte’s 2012 PCAOB Inspection Report Shows That the Firm Is Less Awful at Auditing Than It Used to Be

The PCAOB news is not letting up. Today, the Board released the 2012 inspection report for Deloitte. Considering the turnaround time in years past, this is pretty fast. The 2011 report was issued last December. If you count yourself as one of those people who enjoy A) reading these reports and B) quality auditing, then you will […]

Deloitte Suggests SEC Call the PCAOB If It Wants Those Longtop Documents

Last Friday, the PCAOB announced it had reached Memorandum of Understanding on Enforcement Cooperation with Chinese Regulators. While not a great deal for the Board, most people agreed that, at the very least, it's good for formally asking the Chinese, "Pretty please with sugar on top, may we have a peek at these documents?" Which […]

The PCAOB’s Disappointing Deal with Chinese Regulators

As is its wont, the PCAOB has made a major announcement in very close proximity to a major American holiday. I've been assured in the past that this bad timing is not intentional, but from a PR perspective, it has the tendency to soften the thunder of an important message. But whatever, we'll go with […]

Ernst & Young Latest Big 4 Firm to Have Part II of PCAOB Inspection Report Released

Okay, remind me — there's a saying about "three" and "trend" or "pattern" or something? Forget it, not important. What is important — at least we've made the argument that it is — is that the PCAOB released Part II of Ernst & Young's 2009 inspection report. That makes three out of four Big 4 […]

Guest Post: The PCAOB Is Our Parents Now

Ed. note: The following was written exclusively for Going Concern by a Big 4 auditor who wished to remain anonymous. 

The PCAOB is turning into our parents. Or at least they are using the same tactics in handing out punishment. “We know you were up to no good last night, so if you just tell us what you did we’ll take that into consideration when deciding how long to ground you.”

The PCAOB Is Sorry for the Mess

With PwC CAKEgate in the rearviewmirror, the PCAOB appears to have taken a look around and decided it wants to tidy up a bit by shuffling around its auditing standards. Naturally, Doty & Co. like to run things by everyone first…everyone who has an opinion anyway: The Public Company Accounting Oversight Board has scheduled an […]

Here’s Why Releasing Part II of the PCAOB Inspection Reports Is Important

I know what a lot of you are thinking — "The PCOAB is a bunch of couldn't-hack-it-in-public know-nothings that like nothing more than making hard-working auditors' lives a living hell. And, oh, Part II doesn't mean jack squat." FANTASTIC! Then you won't mind that I'm going to spend the next few hundred words telling you […]

PwC Has Rally Caps on After PCAOB’s Expanded Reports

Yesterday afternoon, right about the time I couldn't read another word about PwC's love of CAKE, this tip came through at approximately 7 pm ET: Tim Ryan just finished up an "emergency" call with all partners and managers about this. Call began at 5:30 EST.  Mr. Ryan, as we noted this morning, was quoted in Floyd […]

PwC Loves CAKE and Other Interesting Things from the Expanded PCAOB Inspection Reports

I don't know if anyone else has noticed this, but reading about audit procedures is incredibly dull. It's nearly as dull as actually performing some of these procedures which probably explains why the PCAOB was forced to release Part II for the 2008 and 2009 inspection reports. Luckily, reading about the failure of the most […]

PCAOB Not Satisfied with PwC’s Efforts to Get Better at Auditing

Deba Aubin at Reuters has a great scoop this morning, reporting that the PCAOB "will fault PwC for not promptly addressing quality control problems found during inspections of some of its 2007 and 2008 audits," according to an internal PwC memo dated today and signed by Bob Moritz. [cue]

PCAOB Member Jay Hanson Repeats His Belief That Auditor Rotation Is Not Gonna Happen

The Brits can do whatever they want; Mr. Hanson has a story and he's sticking to it:    Having reviewed the comment letters and feedback from the round table panelists and others, it is clear to me that there is little support for mandatory audit firm rotation. As I noted in my statement when we issued the […]

The PCAOB Chairman Is Still Talking About Auditor Rotation

Generally speaking, there are two camps when it comes to the idea of auditor rotation or "term limits" as some like to call it.  There is the camp that sees it as an area worth exploring as part of a larger conversation around auditor independence and objectivity. And then there is the camp that does […]

The PCAOB Is Really, Really Serious About Checking Chinese Auditors’ Work

Oh are we still on this?: The head of the U.S. audit watchdog said on Wednesday his organization may need to resort to enforcement actions against auditors based in China if they fail to hand over documents to U.S. regulators. Jim Doty, head of the Public Company Accounting Oversight Board, told the U.S. Securities and […]

Ex-KPMG Chief to Auditors: You Are All Flirting With Irrelevance

According to a Financial Times article posted today, KPMG UK's former head John Griffith-Jones — who is now a regulator for the UK's Financial Conduct Authority — dropped a bomb at a posh lunch for accountants in London recently. Griffith-Jones verbalized what many of us already know and have been saying for years. FT says […]

BDO Keeps Pace with Rival Audit Firms in Terrible PCAOB Inspection Reports

For whatever reason, BDO was excluded in the last-minute lump of coal the PCAOB delivered to Deloitte, Ernst & Young, and Grant Thornton right before Christmas, but that doesn't mean their inspection report wasn't in the same class of quality.  The Board inspected audits at 16 of BDO's 35 offices, inspecting 23 audits with 9 […]

Life After Public Accounting: Harassing Auditors For a Living Isn’t a Bad Gig If You Can Get It

All busy season long, we'll be discussing exit opportunities for those of you feeling like overworked Chinese slave labor counting down the days from your cubes. Remember, there is life after public accounting, even if it doesn't feel like it now. If you've made a break for it and are living the life of your […]

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 […]

Here’s the New Checklist from the PCAOB

It's been a couple years since the PCAOB issued an auditing standard so I guess they wanted to squeak something in before this Mayan thing took a hold. Shall we cram this in before the fires start? Yes. Let's. Here's a piece of the official screed from the Board: The new standard and related amendments […]

KPMG Chairman: Auditor Rotation Is a ‘Terrible Idea’

It's more or less understood by everyone, with a few exceptions, that pursuing mandatory auditor rotation is a giant waste of time. There has been much discussion of the issue — from the hallowed walls of a PCAOB open meeting to the slums of the Going Concern comment section — and while there has been […]

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 […]

PwC to Require More Robust Review and Supervision of Auditors, Although “Minimum Supervision” Still Has Its Place (in Court)

Last month, the PCAOB released its 2011 inspection report for PwC. With a 41% deficiency rate for the 60 audits inspected, it's safe to assume that the firm wishes it could have put up a better number. As we noted at the time, Papa Whiskey Charlie encouraged the PCAOB to step up its game a […]

PCAOB Member Jay Hanson Can’t Imagine a World with Auditor Rotation

On Monday, PCAOB Chairman James Doty gave a speech where he mentioned, among other things, that "auditor term limits" was something the Board would consider in order to "protect the auditor's independence."  Undoubtedly, this was disheartening news to auditors who count themselves as the Big 4 variety because they've gone on record to voice opposition and […]

Auditors Will Be Happy to Know That Term Limits Are Still on the Table

In a keynote speech at the AICPA's National Conference on SEC and PCAOB developments, Chairman Jim Doty passed on the opportunity to mention extremely recent developments and instead focused on things like the importance of independent auditing to "our economic success" and audit firm culture and the PCAOB's current initiatives. In fact, Mr. Doty doesn't mention […]

Hiring Watch ’13: PCAOB

Yesterday, the PCAOB held an open meeting discussing its plans for being the most dominating force in public accounting regulation over the next few years. Within these plans is a strategory to not just be the type of regulator that points out the things that you royally fucked up, but also to be a resource […]

Report: That Sloppy McGladrey Audit Was Definitely Maybe Probably Unity Bank

HEY, everyone remember that really sloppy audit that 3 (then) McGladrey & Pullen auditors got smacked on the wrist and/or face for when the PCAOB found out they threw in a bunch of necessary documentation after the fact? Jonathan Weil over at Bloomberg seems to have unpuzzled the whole thing and is saying the mystery […]

Three McGladrey Auditors Learn a Tick in Time Saves Nine

Everyone knows if you're going to add evidence after an audit is over, you have to do it before the documentation completion date and you better be sure to document the additional material thoroughly. But for McGladrey (then McGladrey & Pullen) auditors Dale Arnold Hotz, Jyothi Nuthulaganti Manohar and Michael Jared Fadner, an impending PCAOB […]

PwC Wants the PCAOB To Get Better

PwC's November just got more annoying. According to the PCAOB's latest inspection, 41 percent of the 60 PwC audits inspected were not up to snuff, up from 37 percent last year. Issues called out by the PCAOB included failures to identify, or to address appropriately, financial statement misstatements, including failures to comply with disclosure requirements, as […]

PCAOB Discovers That Some Firms Consider Audit Quality to Be a Nice Idea That Doesn’t Work in Real Life

PCAOB Board Member Jeanette Franzel, CPA, CIA, CMA, CGFM, gave a speech at University of Tennessee Corporate Governance Center today that discusses "Current Trends and Issues in Public Company Auditing." That's nice and all but the first half of the transcript is more or less a history of auditing and the PCAOB. The second half finally gets […]

China Agrees to “Look But Don’t Touch” PCAOB Visits

Board member Lewis Ferguson tells of China's teasing ways in a speech that he's giving at the California State University SEC Financial Reporting Conference in Irvine: As a first step toward further cooperation [with China], we are working toward and have tentatively agreed on observational visits where PCAOB inspectors would observe the Chinese authorities conducting […]

Big 4 PCAOB Inspection Reports to Be SALY

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 […]

KPMG’s PCAOB Inspection Report Shows Firm’s Audit Quality Was Consistently Meh with Last Year

Late yesterday the PCAOB released the first Big 4 firm inspection report with none other than KPMG (in full on page 2). Compliance Week reported that the House of Klynveld more or less stayed consistent with last year's findings, which basically amounts to everyone shrugging with indifference:  In its first published report from the 2011 […]

Mandatory Audit Firm Rotation: Regulatory Sit ‘n’ Spin

It's been about a year since the PCAOB crapped out Release No. 2011-006, "Concept Release on Auditor Independence and Audit Firm Rotation." Some people in the profession think the PCAOB has no real intention of mandating audit firm rotation; rather, these professional skeptics believe the PCAOB just brought it up to appear relevant. The PCAOB […]

PCAOB’s Latest Report Finds That Auditors of Broker-Dealers Suck, Too

PCAOB Auditor Wrecking Ball Tour 2012 rolls on with the an interim report on the auditors of broker-dealers. And this time there's 100% deficiency!  From the Executive Summary of the Report on the Progress of the Interim Inspection Program Related to Audits of Brokers and Dealers:  This report presents observations from inspections of portions of […]

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! […]

Crowe Horwath May Have the Worst PCAOB Inspection Report Yet

PCAOB Terror Tour 2012 continues with the release of the inspection for Oakbrook Terrace's own Crowe Horwath. Up until this point, we thought that no one was going to make a run at the deplorable performances of Deloitte and McGladrey but ol' Crowe (as opposed to Old Crow) has managed to do it. PCAOB examiners found […]

This is a Makeshift Card for Sarbanes-Oxley’s Anniversary That You Should All Sign

As we mentioned, today is the 10th anniversary of Sarbanes-Oxley. Or was it yesterday? I guess it depends on who you ask. Technically, it was enacted on July 29th and President Bush signed it into law on July 30th. Personally, I prefer it to be the 29th because since I've started writing for this here […]

Scoring Sarbanes-Oxley

As we pointed out in this morning's roundup, the New York Times' Room for Debate is discussing the success/failure of Sarbanes-Oxley. Sunday marks SarbOx's 10th birthday so naturally people in the accounting and compliance world are getting all nostalgic about it and yeah, okay, nostalgia can be fun sometimes. The Times had four contributors in […]

PCAOB vs Public Accounting (War)

Ed. note: This is Lee St. Mark's second submission as we chug along in the Going Concern freelancer finals. His initial submission can be found here. You know what to do. It's no secret – the PCAOB tears at the soft underbelly of the accounting industry on a daily basis. I've seen them show up […]

Survey Surprises Surveyors After Finding Support for Auditor Rotation

In a recent survey of public companies assessing views on Sarbanes-Oxley a decade after its adoption, Protiviti also asked companies what they think of the PCAOB's recent suggestions that mandatory rotation might improve auditing. Nearly half of all survey respondents agreed that rotation would have a positive impact. Among large accelerated filers, Protiviti said 47 […]

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 […]

The PCAOB Inspection Report of Grant Thornton Could Have Been Worse

The Board inspected 41 audits at 21 of Grant Thornton's 51 offices. Fifteen issuers were cited in the report that included various failures, primarily related to "obtain[ing] sufficient appropriate audit evidence to support its opinions on the financial statements and on the effectiveness of [internal controls over financial reporting]." There was everything from failure to […]

McGladrey’s PCAOB Inspection Report Is Pretty Awful

The PCAOB continues tearing through audit firms like a Texas twister on a random Tuesday during tax season, as it unleashed its fury on McGladrey yesterday. How bad was it? Well, Deloitte can certainly feel better about itself. The Board reported deficiencies in nine of the nineteen (~47%) audits inspected. Deloitte, if you remember, had […]

The PCAOB Knows You’re Monkeying Around with Documents

The PCAOB's Director of Enforcement and Investigations, Claudius Modesti, is on to your little game. You know, the one where you get all shifty with your audit workpapers once the word spreads around your office that inspectors will giving your ticks and ties the stinkeye. Oh? Not familiar with anything of the kind, you say? This […]

Congressional Members Seem to Have Their Orders Re: Auditor Rotation

You may remember that last Wednesday I put my grown-up clothes on and attended the PCAOB's open meeting on auditor rotation. It was a good discussion (relatively speaking) and I got chat with some pretty smart people. I can't work a room of old white men like Adrienne (few can), but Chairman James Doty seemed […]

Happening Now: Live-Tweeting the PCAOB Auditor Rotation Open Meeting

If you have absolutely nothing to do this afternoon and were unable to book a flight to DC in time to sit in on the fantastic PCAOB independence and auditor rotation meeting happening NOW, Colin is live-tweeting from @going_concern all afternoon. If you are looking for snarky, possibly unnecessary criticism of Big 4 (+ GT) […]

PCAOB Is Giving You a Second Chance to Tell Them How Much You Love the Idea of Auditor Rotation

Yesterday, Monday Morning Auditor that everyone loves to hate, the PCAOB, announced that they would be having an open meeting on March 21-22 that will focus on auditor independence and rotation. Sorry! I meant auditor term limits. Anyway, there are going to be several big names on various panels including Paul Volcker, Harvey Pitt, Arthur Levitt, […]

An Open Letter To the PCAOB From the Going Concern Comment Section

I believe this particular PCAOB-hostile grunt has spoken: Dear Mr. G – I hate to break this to you, but accountants do not respect the PCAOB. We HATE the PCAOB. This organization does nothing but bring misery to our lives, for no matter how good our work product is, this group comes along and finds […]

PwC Japanese Affiliate Has Two of Its Ugly Audits Exposed

Today, Bloomberg's Jonathan Weil wrote his fourth column exposing clients of a Big 4 audit firm whose PCAOB inspection report reveals that the audit performed was less than stellar. This time around, JW exposes two clients of PwC's Japanese Affiliate Kyoto Audit Corp.: The report [in full, below] said the board’s staff reviewed the firm’s audits for […]