- news
- AUDIT & ASSURANCE
Root cause analysis: Auditor tool gaining traction on multiple fronts
Related
PCAOB publishes guidance related to Audit Evidence amendments
A&A Focus recap: AI considerations in A&A, GASB updates, and practical lease accounting challenges
New: Digital assets practice aid addresses auditing of lending, borrowing
TOPICS
A new PCAOB spotlight report provides staff observations regarding the potential positive impact of performing a root cause analysis on the quality of audits performed by PCAOB-registered public accounting firms.
The insights shared in Root Cause Analysis — An Effective Practice to Drive Audit Quality are “not intended to prescribe how a firm might perform that analysis or the framework a firm might develop but is meant to help smaller firms right now in their efforts to improve audit quality.”
The PCAOB has a proposal for new quality control system regulations, pending since November 2022, that would require root cause analysis.
The observations happen to come along as many firms work to establish a quality management system by December 2025 as required by the AICPA Auditing Standards Board — a suite of standards that will require firms to investigate the root causes of identified deficiencies.
The PCAOB recently announced a series of forums (in person and virtual) aimed at educating and assisting small firms that fall under the board’s purview, beginning May 22 in Chicago.
Earlier this month, the PCAOB published a spotlight report, Inspection Observations Related to Auditor Use of Data and Reports, that shared good practices aimed at improving how auditors test information produced by companies and external sources in order to identify common audit deficiencies.
— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.