If Cleveland-based public accounting firm Cohen & Co. were an English Premier League goalkeeper, the firm would have gotten a clean sheet. Or if you’re not a fan of European soccer but like the NHL, Cohen & Co. would be like a goalie who finished the game with a shutout.
In its 2019 PCAOB inspection report, Cohen—the 49th largest CPA firm in the nation in terms of revenue according to INSIDE Public Accounting—aced all nine of its audits that were reviewed by inspectors during the 2018 inspection cycle.
Now some of you will say that Cohen did so well because its sample size was much smaller than the 58 audits of Deloitte’s that were inspected or the 26 of BDO USA’s that were reviewed by inspectors. But it doesn’t matter if a goalie stops nine out of nine shots, 26 out of 26 shots, or 58 out of 58 shots during a game—it still goes down on the stat sheet as a clean sheet/shutout.
And Cohen’s audit quality success isn’t a fluke. According to the firm’s last three PCAOB inspection reports, the firm only screwed up ONE of the 24 total audits inspected, for a failure rate of 4%.
All hail your undisputed overlords of audit quality. Here is Cohen’s unblemished 2019 PCAOB inspection report:
The PCAOB does not hold non-Big 4 firms to the same standards as they hold Big 4 firms. Not to say that this isn’t impressive, but more to point out how truly awful BDO must be at auditing.
A few things to keep in mind.
1. Zero of the audits inspected were ICFR audits. Take out ICFR audits, and the deficiencies identified in other inspection reports would go way down.
2. Their client base are much smaller companies with a lot less complexity to them. Now while it’s true that smaller clients typically have crappier accounting staffs and make the audits harder on the staff, they are a lot easier to audit from an issues perspective.
I know the article is just trolling, but it’s really stupid to compare the Big 4 results to a firm like Cohen, as the audits inspected are not similar in the least.
The audits conduct by Cohn are fund audits which do not issue an opinion on controls. It’s like comparing apples and oranges. This article is very misleading and not close to accurate.
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