PCAOB Points Auditing Deficiencies in PricewaterhouseCoopers Inspection Procedure
The PCAOB has issued a completely new report based on inspections carried out on PwC (PricewaterhouseCoopers) in 2011. In the report PCAOB has outlined deficiencies in addition to 3 examples of auditing related failure.
The team that carried out inspection stated that some of the deficiencies that were listed in the report were of such importance that it came across as if the entity, while issuing the audit related report could not succeed in acquiring appropriate and enough auditing proof that supported its opinion with regard to auditing on the finance related statements or/and on IFCR’s (internal control over financial reporting) effectiveness.
The report further clarified that yet another deficiency that took place while auditing in which the entity played a major part but wasn’t the major auditor, was also of a lot of importance as it came across that during the audit process the entity had failed to obtain sufficient as well as appropriate evidence pertaining to audit in order to fulfill its audit related objectives.
In yet another audit related instance, shared by the Public Committee Accounting Observation Board, the board stated that PwC did not perform enough procedures for evaluating whether the investment made by the issuer in a different organization was properly accounted or not. The entity also could not succeed in performing any processes, beyond inquiring the management as well as reading a memorandum prepared by the issuer, for evaluating the conclusions made by the issuer that the investments made by it in the concerned organization should be recorded in the books on the basis of the cost related method.
While PwC did defend its audit related actions with regard to the PCAOB auditing report, the company also clarified that it has taken suitable actions with an intention to enhance the auditing quality.
PricewaterhouseCoopers’s Bob Moritz as well as Tim Ryan Assurance leader of United States stated that they are of the opinion that like any other auditing procedure, judgments are involved only in the process of inspection and accounting professionals can arrive at different viewpoints and conclusions whether the auditing related proof in a given situation is adequate or not.