The Securities and Exchange Commission (SEC) is paying added scrutiny toward audit firms’ increasing use of network affiliates in their work and the potential for inconsistent quality that comes with such an approach.
SEC Chief Accountant Paul Munter in a statement Friday emphasized the importance of the lead auditor’s role in ensuring quality and independence while citing a handful of enforcement actions brought by the Public Company Accounting Oversight Board (PCAOB) in 2022 against audit firms relying on the work of unregistered affiliates without proper documentation.
