The Public Company Accounting Oversight Board says audits of internal controls over financial reporting are improving—but they still are not focusing as much on risk and efficiency as regulators would like.
In a report issued last week to review second-year compliance with Auditing Standard No. 2, the Board said that in some cases auditors still don’t fully integrate the audits of internal controls over financial reporting and audits of the financial statements. They also fail to apply a top-down approach to testing controls, assess risk at the account level instead of focusing on management’s assertions, and ignore the work of others that might make the audit process more efficient.
