Public Company Accounting Oversight Board
“PCAOB Sees Decline in Audit Quality,” Michael Cohn, AccountingToday.com (October 5, 2011). The number of audit deficiencies found by PCAOB inspectors did not decline in 2010. Problem areas include valuation of financial instruments, Chinese companies executing reverse mergers with U.S. shell companies, clients jumping from auditor to auditor, changes in accounting standards, and inadequate disclosures in audit reports.
“New PCAOB Chairman Pushes for Audit Overhaul,” Michael Cohn, AccountingToday.com (May 5, 2011). Chairman James Doty discusses items on the PCAOB's agenda such as revising the auditor's report, making disciplinary proceedings public, closing the expectation gap, addressing industry concentration, and inspecting public accounting firms' foreign affiliates.
PCAOB Organization:
“The PCAOB 101,” Tom Olach, Internal Auditor (June 2008): 50-54. This article provides a concise overview of the PCAOB’s activities including registration of accounting firms, standard setting, inspections, and enforcement.
“Supreme Court Rules Against PCAOB,” Michael Cohn, WebCPA.com (June 28, 2010). Although the US Supreme Court ruled that limitations on the SEC’s ability to remove PCAOB members violate the constitution, the board continues to function. In the future, the SEC will be able to dismiss PCAOB members at will.
PCAOB Inspection Reports:
“PCAOB Inspections and Large Accounting Firms,” Bryan Church & Lori Shefchik, Accounting Horizons (March 2012): 43-63. This article summarizes the audit deficiencies reported by PCAOB inspectors during years 2004-2009.
“PCAOB Spotlights Auditing Problems from Economic Crisis,” WebCPA.com (September 29, 2010). A PCAOB report describes audit deficiencies related to mark-to-market accounting, goodwill impairment, off-balance sheet financing, and loan loss reserves.
“PCAOB: The 11 Things Auditors Need to Fix,” Sarah Johnson, CFO.com (October 23, 2007). The PCAOB reports the most common deficiencies discovered during 439 inspections of smaller CPA firms.
PCAOB Sanctions:
“Ernst & Young to Pay $2 Million to Settle Audit Failure Charges,” Michael Cohn, AccountingToday.com (February 8, 2012). The PCAOB fined EY $2 million and sanctioned four partners for deficient audits of Medicis Pharmaceutical Corp.
“PCAOB Sanctions Three Auditors,” Allen Rappeport, CFO.com (December 17, 2007). Two BDO Seidman auditors were sanctioned for omitting work and backdating documents. One KGO auditor was sanctioned for performing a deficient audit and because his mother owned stock in the client.
“Deloitte Receives $1 Million Fine,” Judith Burns, Wall Street Journal (December 11, 2007): C8. The PCAOB censured and fined Deloitte & Touche for a deficient audit of Ligand Pharmaceuticals.
“PCAOB Sees Decline in Audit Quality,” Michael Cohn, AccountingToday.com (October 5, 2011). The number of audit deficiencies found by PCAOB inspectors did not decline in 2010. Problem areas include valuation of financial instruments, Chinese companies executing reverse mergers with U.S. shell companies, clients jumping from auditor to auditor, changes in accounting standards, and inadequate disclosures in audit reports.
“New PCAOB Chairman Pushes for Audit Overhaul,” Michael Cohn, AccountingToday.com (May 5, 2011). Chairman James Doty discusses items on the PCAOB's agenda such as revising the auditor's report, making disciplinary proceedings public, closing the expectation gap, addressing industry concentration, and inspecting public accounting firms' foreign affiliates.
PCAOB Organization:
“The PCAOB 101,” Tom Olach, Internal Auditor (June 2008): 50-54. This article provides a concise overview of the PCAOB’s activities including registration of accounting firms, standard setting, inspections, and enforcement.
“Supreme Court Rules Against PCAOB,” Michael Cohn, WebCPA.com (June 28, 2010). Although the US Supreme Court ruled that limitations on the SEC’s ability to remove PCAOB members violate the constitution, the board continues to function. In the future, the SEC will be able to dismiss PCAOB members at will.
PCAOB Inspection Reports:
“PCAOB Inspections and Large Accounting Firms,” Bryan Church & Lori Shefchik, Accounting Horizons (March 2012): 43-63. This article summarizes the audit deficiencies reported by PCAOB inspectors during years 2004-2009.
“PCAOB Spotlights Auditing Problems from Economic Crisis,” WebCPA.com (September 29, 2010). A PCAOB report describes audit deficiencies related to mark-to-market accounting, goodwill impairment, off-balance sheet financing, and loan loss reserves.
“PCAOB: The 11 Things Auditors Need to Fix,” Sarah Johnson, CFO.com (October 23, 2007). The PCAOB reports the most common deficiencies discovered during 439 inspections of smaller CPA firms.
PCAOB Sanctions:
“Ernst & Young to Pay $2 Million to Settle Audit Failure Charges,” Michael Cohn, AccountingToday.com (February 8, 2012). The PCAOB fined EY $2 million and sanctioned four partners for deficient audits of Medicis Pharmaceutical Corp.
“PCAOB Sanctions Three Auditors,” Allen Rappeport, CFO.com (December 17, 2007). Two BDO Seidman auditors were sanctioned for omitting work and backdating documents. One KGO auditor was sanctioned for performing a deficient audit and because his mother owned stock in the client.
“Deloitte Receives $1 Million Fine,” Judith Burns, Wall Street Journal (December 11, 2007): C8. The PCAOB censured and fined Deloitte & Touche for a deficient audit of Ligand Pharmaceuticals.
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