PwC Reports Jump in Audit Flaws, Following Trend by EY, Deloitte

US, Jan. 29, 2024

PwC LLP said Monday that the number of its flawed audits US inspectors flagged more than doubled in 2022 even as the Big Four firm rolls out a series of reforms meant to bolster its reviews of corporate accounting.

The US audit regulator is expected to report that PwC had violations in five out of 54 audits reviewed, compared to just two problem engagements the year before, the firm said in a midyear update on its audit quality.

“We are proud of our record of profession-leading PCAOB inspection results,” the update said, referring to the Public Company Accounting Oversight Board, which reviews the work of the largest US firms annually.

PwC also updated its progress adopting a series of initiatives meant to bolster the firm’s auditing over the next three years.

PwC is the third of its top competitors to preview yet-to-be released results for audits inspected in 2022 getting out ahead of the audit regulator.

Ernst & Young LLP previously reported problems with 46% of its audits and Deloitte has said the regulator found problems with 17% of its audits, compared to PwC’s 9%.

The PCAOB has warned that inspection violations jumped to 30% on average for 2022 across the largest six US firms, with rising violations in five of those firms.

[Bloomberg Law]