The PCAOB is directed by Section 104 of the Sarbanes-Oxley Act of 2002 to conduct a continuing program of inspections to assess the degree to which each registered firm and its associated persons comply with the Act, the rules of the PCAOB and the SEC, and professional standards in connection with the performance of audits, the issuance of audit reports, and related matters involving public companies.
Firms that are registered with the PCAOB may be subject to its inspection program, which will only evaluate the SEC issuer or public company audit practice. All firms will continue to require peer review of the rest of their auditing and accounting practice in order to satisfy AICPA membership, federal regulatory (e.g., Generally Accepted Government Auditing Standards) and/or state licensing requirements.PCAOB Resources
The following are some useful tools and resources for firms to consider as they prepare for a PCAOB inspection.
Board Public Reports
- PCAOB Report on Inspections of Domestic Firms that Audit 100 or Fewer Public Companies, February 25, 2013
- Related CAQ Alert #2013-02
- Observations from 2010 Inspections of Domestic Annually Inspected Firms Regarding Deficiencies in Audits of Internal Control Over Financial Reporting, December 10, 2012
- Related CAQ Alert #2012-19
- PCAOB Report on the Progress of the Interim Inspection Program Related to Audits of Brokers and Dealers, August 20, 2012
- PCAOB Report on Observations of PCAOB Inspectors Related to Audit Risk Areas Affected by the Economic Crisis, September 2010
- PCAOB Issues Report on First-Year Implementation of Auditing Standard No. 5, September 2009
- PCAOB Report of the 2004, 2005, 2006 and 2007 Inspections of Domestic Annually Inspected Firms, December 2008
- PCAOB Releases Report on Inspection Observations on Smaller Registered U.S. Firms, October 2007
- PCAOB Releases Report on Auditors' Implementation of the Interim Fraud Standard, January 2007
- PCAOB Issues Information About its Process for Determining Whether a Firm Has Satisfactorily Addressed Quality Control Criticisms in Inspection Reports, March 2006
Additionally, PCAOB guidance such as Staff Audit Practice Alerts, Staff Questions and Answers and other guidance may be useful to identify potential areas of focus for PCAOB inspections.