PCAOB Staff Outline 2024 Inspection Priorities with Focus on Driving Improvements in Audit Quality

The staff report includes key risks and considerations auditors should focus on, along with questions for audit committees and more

Washington, DC, Dec. 20, 2023

Public Company Accounting Oversight Board (PCAOB) inspectors outlined their priorities for 2024 inspections in a PCAOB staff report out today. The report highlights key risks, like high interest rates, and other considerations, like audit areas with recurring deficiencies, that auditors should be focused on when planning and performing audit procedures. It notes that the PCAOB will continue to prioritize inspections of financial-services sector audits, digital assets, and more.

The report also includes suggested questions for audit committees to hold firms accountable to high standards when hiring and overseeing the audit process.

“Our inspection priorities Spotlight provides firms with important insights to help them plan and perform high-quality audits investors deserve,” said PCAOB Chair Erica Y. Williams. “We encourage firms and audit committees to make use of this important tool to help improve audit quality.”

The report also reiterates the inspection staff’s commitment to enhancements to our inspection program, such as increasing the number of engagements reviewed and improving the timeliness of inspection reports.

Among the PCAOB’s inspection enhancements in 2024 will be the creation of a PCAOB team that will evaluate culture across the largest domestic audit firms. This initiative will include interviewing firm personnel and evaluating other documentation, with the aim of using this information to enhance the PCAOB’s understanding of how audit firm cultures may be affecting audit quality.

Overall Business Risk Considerations:

Our 2024 inspection program will consider overall business risks present in the audits inspected. A few of these business risks include:

  • Persistent high interest rates, tightening of credit availability, and/or inflationary challenges.
  • Disruptions in the supply chain and rising costs.
  • Business models that are significantly impacted by rapidly changing technology.
  • Geopolitical conflicts.
  • Financial statements that include areas with a higher inherent risk of fraud, estimates involving complex models or processes, and/or presentation and disclosures that may be impacted by complexities in the public company’s activities.

Prioritized Sectors/Industries:

In 2024, in addition to continuing to select some engagements for review based on risk and some randomly, we will do the following:

  • Continue our emphasis on selecting audits of companies engaging in merger and acquisition activities or business combinations.
  • Continue our emphasis on selecting audits of broker-dealers that file compliance reports and others that provide customers with various investment opportunities, such as introducing brokers.
  • Continue to select non-traditional audit areas to inspect.

Beyond the selection factors mentioned above, we will place continuing emphasis on selecting audits of public companies in industries and sectors with specialized accounting and/or that may be negatively impacted by uncertainties and volatility in the economic and geopolitical environment. In 2024, our selection process will prioritize the following three sectors in particular:

  • Financials
  • Information Technology
  • Other

Inspections Considerations:

The report also discusses a range of considerations that should be important for auditors when planning and performing risk assessments and audit procedures. These considerations include:

  • Challenges and Recurring Deficiencies We Have Observed in Our Inspections of Auditors of Broker-Dealers
  • Recurring Deficiencies
  • Evaluating Audit Evidence
  • Understanding the Company and Its Environment
  • Use of Other Auditors
  • Going Concern
  • Critical Audit Matters (CAMs)
  • Digital Assets
  • Cybersecurity
  • Use of Data and Technology

Updated List of Questions that Audit Committees May Want to Consider

In the context of the PCAOB’s 2024 inspections, the report contains suggested questions for audit committee members to consider amongst themselves or in discussions with their independent auditors. These questions are designed principally to further two-way communication on topics such as auditor understanding of the business, fraud, going concern, other auditors, CAMs, and the company’s use of technology.

Chair Williams has encouraged audit committees to ask questions in order to hold firms accountable to performing high-quality audits.

The Spotlight can be found at the PCAOB’s Staff Publications page, along with other resources aimed at fostering understanding of the PCAOB’s and its staff’s activities and observations.


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.


PCAOB Office of Communications and Engagement
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