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PCAOB criticizes EY and other big firms in recent inspections

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Article Summary

TLDR:

Key Points:

  • PCAOB released inspection reports for Big Four and major firms showing mixed results on auditing quality
  • EY, Deloitte, PwC, and KPMG all had deficiencies identified in their audits

Article Summary:

The Public Company Accounting Oversight Board (PCAOB) recently released inspection reports for the Big Four and other major firms, indicating varying levels of auditing quality. Ernst & Young (EY) faced significant deficiencies in 25 out of 54 audits reviewed, primarily related to testing controls over revenue and related accounts. EY issued a statement acknowledging the shortcomings and outlining steps to improve audit quality.

Deloitte & Touche, PricewaterhouseCoopers (PwC), and KPMG also had deficiencies identified in their audits, with each firm responding with plans to enhance audit quality. KPMG redacted the exact number of audits with deficiencies, but highlighted efforts to promote audit quality through upskilling auditors and investing in audit technology.

Other major firms, including BDO USA, Grant Thornton, Crowe, RSM US, Marcum LLP, Baker Tilly US, and BF Borgers, also received mixed results in their inspection reports, with varying levels of deficiencies identified in their audits.

The PCAOB’s findings underscore the importance of maintaining high audit quality standards in the industry. Firms are working to address deficiencies, strengthen audit practices, and uphold integrity and accountability in their audit processes.


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