PCAOB inspectors offer advice in areas of risk

PCAOB inspectors repeatedly noted the value of using experts in a report focused on emerging areas of risks in public company audits.

The staff report, Observations From the Target Team’s 2023 Inspections, offered insights from PCAOB audit inspectors related to cryptoassets, multi-location audits, and significant or unusual events or transactions.

In all three areas, the “good practices” recommended by inspectors called for audit firms to voluntarily turn to the likes of specialists, subject matter experts, consultants, and senior team members for assistance.

In terms of deficiencies found in the audits inspectors reviewed for the report, the large majority involved cryptoassets. In that area, inspectors found concerns related to:

• The auditor’s response to the risks of material misstatement;

• An audit of internal control over financial reporting that is integrated with an audit of financial statements;

• Audit evidence;

• Auditor reporting of certain audit participants; and

• Auditor independence.

In their review of multi-location audits, inspectors highlighted the presence of inaccurate information on Form AP.

News from other US regulatory agencies

The SEC adopted rule and form amendments to enhance the security of EDGAR (the Electronic Data Gathering, Analysis, and Retrieval system) while improving filers’ access and account management capabilities. … FASB is seeking comment through Nov. 14 on a proposed Accounting Standards Update (ASU) to improve guidance for share-based consideration payable to a customer in conjunction with selling goods or services. FASB also is seeking comment through Nov. 25 on a proposed ASU that would clarify certain aspects of guidance on hedge accounting. … The Federal Accounting Standards Advisory Board (FASAB) issued Statement of Federal Financial Accounting Standards (SFFAS) 64, Management’s Discussion and Analysis: Rescinding and Replacing SFFAS 15; and Statement of Federal Financial Accounting Concepts (SFFAC) 10, Omnibus Concepts Amendments 2024: Amending SFFAC 2 With Note Disclosures and MD&A Concepts and Rescinding SFFAC 3.

— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.