PCAOB inspectors offer advice in areas of risk

October 2, 2024

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.

[Journal of Accountancy]