PCAOB Staff Report Shares Observations To Help Auditors With Testing of Information Produced by Companies and External Sources

Today, the PCAOB released a new staff Spotlight report, “Inspection Observations Related to Auditor Use of Data and Reports(PDF).”

The Spotlight is aimed at improving auditor understanding of how to properly test (1) information produced by the company and (2) information from external sources.

Examples of information produced by the company (IPC) include invoices or shipping documents issued by the company, as well as other data and reports from a company’s information technology systems. Information received from external sources includes, for example, purchase orders submitted by customers or bank records.

In both the 2021 and 2022 inspection cycles, approximately 17% of the audits inspected by the PCAOB had deficiencies where the auditor did not perform sufficient procedures to test (or sufficiently test controls over) the accuracy and completeness of IPC or information from external sources.

To improve audit quality, the Spotlight highlights (1) common audit deficiencies, (2) good practices, and (3) other reminders that may improve auditor understanding of how to properly test IPC and information from external sources.

Visit the PCAOB’s Staff Publications page for more resources on the PCAOB's activities and observations.

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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.