The Public Company Accounting Oversight Board has given auditing firm Grant Thornton a stern rap on the knuckles, saying the firm failed in five audits to perform adequate testing on financial statement assertions to support its audit conclusions.

In its first report on a major audit firm from the 2007 inspection cycle, PCAOB inspectors picked apart five Grant Thornton audits performed in 2007 on 2006 financial statements and cited a number of instances where auditors failed to perform adequate audit procedures or failed to document the procedures that were performed.

Grant Thornton says it performed a total of 404 audits subject ...