It seems the Public Company Accounting Oversight Board is not the only audit regulator troubled by audit quality around internal controls over financial reporting and fair value. It’s a big problem in other countries as well, according to a recent survey by the International Forum of Independent Audit Regulators.
IFIAR assembled the inspection findings of 30 member regulators through July 2013 and found internal control testing and auditing fair value measurements proved to the leading areas of deficiency in the audits inspected, consistent with themes emerging from the PCAOB the past few years. Also high on the list: procedures to assess the adequacy of financial statement presentations and disclosures. When aggregating the results, the leading area of audit deficiencies at major financial institutions revolved around allowance for loan losses and loan impairments, internal control testing, and the valuation of investments and securities, the IFIAR reported.
