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A guide to PCAOB inspections

FINANCIAL REPORTING INSIGHTS

The Center for Audit Quality recently published a Guide to PCAOB Inspections to provide an overview of the Public Company Accounting Oversight Board’s (PCAOB) inspection program. Among other topics, the guide discusses:

  • The PCAOB inspection process, including how the PCAOB selects audits to inspect and how it inspects an audit and an accounting firm’s quality controls
  • The content of PCAOB inspection reports, including the following five things to keep in mind when reading these reports:
    • Audit quality is strong.
    • “Deficiencies” don’t necessarily mean financial statement errors or defects in a firm’s system of quality control.
    • Audits inspected do not constitute a representative sample.
    • Inspection reports are not comparable from firm to firm.
    • The PCAOB recognizes auditors adapted to COVID-19.
  • How audit firms approach the remediation of audit deficiencies and quality control criticisms identified in PCAOB inspections
  • Questions audit committees could ask about the PCAOB inspection of their audit firm

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