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Delayed inspection reports will show plateau in audit improvements

Tammy Whitehouse | December 11, 2017

When reports begin to emerge on the latest inspection findings for the major audit firms, they will show no broad, appreciable improvements over the prior year.

That’s the word from representatives of the Public Company Accounting Oversight Board, who say some of the largest audit firms have “plateaued” in terms of reducing the number of adverse findings in regulatory inspections. “This plateau may call for a renewed focus on firms’ quality assurance systems from the top down,” said PCAOB member Jeanette Franzel at a recent national accounting conference.

Generally over the past few years, the leading audit firms have incrementally reduced the percentage of inspected audits that are found by inspectors to have deficiencies, and they’ve reduced the severity of the findings overall, said Franzel. In fact, among smaller firms...

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