The Public Company Accounting Oversight Board publishes inspection reports on the largest firms annually. After several years of reporting, the board has steadily increased the amount of data it provides in each report. Over time, the reports are beginning to reveal differences in how the largest firms have adapted to the new regulatory regime.
The following tables, compiled by Columnist Tammy Whitehouse, summarize audit deficiencies across the six largest firms from 2009 to 2016, the last year for which complete data is available for those firms.
A separate table below shows a selection of the increasing data that is available on the inspection of audits of internal control over financial reporting, the most common problem area identified in inspection reports across the major firms in recent years. Under inspection rules, quality control criticisms are not published in inspection reports unless a firm fails to address those criticisms to the board’s satisfaction within a year.
The board has the discretion to republish a firm’s report where firms fail to timely address those concerns. Across the six major firms, the PCAOB has republished the following reports: Deloitte (2008, 2007), EY (2010, 2009), KPMG (2015, 2014, 2011, 2010), PwC (2009, 2008), Grant Thornton (2009, 2008), and BDO USA (2012, 2010).
A. Report describes deficiencies in three additional audits that were inspected before the board discovered allegations of fraud in the inspections process
B. Report describes two additional audits with single deficiencies but includes them in a summary discussion rather than listing them individually
C. Report describes two additional audits with single deficiencies, but includes them in a summary discussion rather than listing them individually
D. Report describes 11 additional audits with single deficiencies, but includes them in a summary discussion rather than listing them individually
E. Report describes one additional audit with a single deficiency but includes it in a summary discussion rather than listing it individually
Source: CW analysis of firm inspection reports
Special report: Building a better audit
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Charts: Exclusive analysis of audit inspection reports
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