PCAOB Posts Staff Preview of 2018 Inspection Observations

The PCAOB posted to its website the Staff Preview of 2018 Inspections Observations(PDF). This staff preview includes, for the first time, good practices regarding efforts to improve audit quality. It also addresses areas of common deficiencies, observations on technology, and implementation of new accounting and auditing standards and rules. The preview includes observations of U.S. and non-U.S. audit firms, inspected both annually and triennially.

Highlights of good practices observed include:

• Expanding accountability and revising training programs
• Establishing a network of specialized professionals to address emerging risks

Areas of deficiencies observed in 2018 include:

• Internal Controls of Financial Reporting and Revenue Risk Assessment
• Accounting estimates such as Allowance for Loan and Lease Losses (ALLL)

The Board’s strategic plan highlights a commitment to proactive communication with stakeholders to inform them about the PCAOB’s oversight activities. This staff preview aims to provide timely and relevant information to both auditors and audit committees.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.