Investors trust audit firms to confirm the financial integrity of organizations across industries, and now regulators are challenging auditors to look within their own firms to enhance the quality of financial statement auditing.
The Public Company Accounting Oversight Board (PCAOB) released an analysis showing a concerning trend of increased audit deficiencies and noncompliance with PCAOB standards and rules. PCAOB staff expects approximately 40% of the audits reviewed in 2022 will have one or more deficiencies, up from 34% in 2021 and 29% in 2020. And the Securities and Exchange Commission (SEC) continues to charge audit firms and audit firm executives with improper professional conduct for violating auditing standards.
In this article for Thomson Reuters, Brad Wilson and Ksenia Ioffe dig into the current environment surrounding increased scrutiny of auditors, and provide practical guidance on how audit firms must double down on a culture of integrity and ensure that they have quality control systems in place to enforce compliance. Like their clients, firms must invest in their own compliance and internal controls to guard against potential misconduct.