Washington, D.C., Sept. 29, 2010
The Public Company Accounting Oversight Board today released a report summarizing inspection observations of audits of financial institutions and other companies during the economic crisis.
The Board is issuing this report to inform the public about the audit risks and challenges that it has identified through its inspection program as a result of the disruption in credit and financial markets and the broader economic downturn.
"This report provides illustrative examples of the kinds of issues our inspection program has uncovered during the past three years as a result of the impact of the economic crisis on the work of auditors," said PCAOB Acting Chairman Daniel L. Goelzer. "These inspection observations underscore the need for auditors to be diligent in assessing and responding to emerging areas of risk when economic and business conditions change."
The key points discussed in the report include –
George Diacont, Director of the Division of Registration and Inspections, added, "PCAOB inspectors will continue to adapt to emerging issues. Inspectors also will focus on whether firms are addressing the quality control deficiencies described in Board inspection reports."
The report is based on PCAOB inspections that examined portions of audits of financial institutions, financial services companies, and other companies that posed audit risks and challenges specific to the disruption in the credit and financial markets and the broader economic downturn.
The report covers aspects of PCAOB inspections conducted during the 2007 through 2009 inspection cycles, which generally involved reviews of audits of issuers' fiscal years ending in 2006 through 2008. The majority of the inspection observations discussed in this report were identified by inspectors during the 2009 inspection cycle and included in 2009 inspection reports, which were issued by the PCAOB in 2010.
** Some of the information in this report has previously been reported in public portions of inspection reports on individual firms; but the report also includes information not previously made public.