PCAOB Establishes that there were High Deficiencies in Audits of Dealers and Brokers

Saturday, August 29, 2015 Print Email
In a report by the Public Company Accounting Oversight Board, it confirmed that out of the ten audit dealers and brokers that were put under examination in 2014, nine of them suffered some audit deficiencies while others had independent issues. The annual report of the inspection program by the board covers inspections of audits carried out in 2014 and which were conducted for the fiscal year ending on or before 31st May 2014.

· The following are some of the findings discovered:

· Out of 106 audits that were singled out for inspection, there were 26 independent findings

· The board identified deficiencies at each of the sixty six firms where inspection was conducted and also in the 87 % of the audits that were selected.

· These independent findings related primarily to assisting with financial statements preparation while the inspection staff at PCAOB discovered numerous audit deficiencies in revenue recognition, reports and record reliance, accounting estimates of fair value and also disclosure and presentation of financial statements.

· The report noted that even if deficiencies and findings were discovered across many types of audit firms, those firms that failed to audit issuers were seen as having a high percentage of deficiencies and findings than those firms who audited their issuers.

· The program leader of the Broker-Dealer Audit Firm Inspection Program and deputy director of PCAOB in the Division of Registration and Inspections, Robert Maday said that they had been urging firms that dealers in audit brokerage need re-examining their audit approaches because of on -going issues that were seen at the time of inspection.

· In the year 2015, the board plans to increase the number of inspected firms by fourteen percent and is working hard to establish an inspection program that is permanent.

Source: ReadyRatios

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