Auditors are making too many mistakes in their audit of internal control over financial reporting, prompting a new warning from the Public Company Accounting Oversight Board to pay closer attention to auditing standards and the firms’ own audit methodologies.
The PCAOB said in a summary of its inspection findings with respect to internal control over financial reporting that it found problems with the audit of ICFR in 15 percent of all the audits it checked in its 2010 inspection cycle, which focused on 2009 financial statements. And the failure rate is even higher — 22 percent — in the board’s 2011 inspection cycle. Only a few days earlier, the PCAOB also issued a practice alert to auditors to call for more objectivity and skepticism in audit work.
