TheCorporateCounsel.net

The PCAOB issued its list of inspection priorities in a staff report issued earlier this week. Here’s the full list of priorities, which are laid out in the press release accompanying the report:

– Risk of fraud
– Auditing and accounting risks
– Risk assessment and internal controls
– Financial services specific considerations
– Broker-dealer specific considerations
– M&A, including de-SPAC transactions
– Digital assets
– Use of the work of other auditors
– Quality control (particularly talent retention and its impact on audit quality, and independence)
Other areas of inspection (critical audit matters, cybersecurity, and use of data and technology in the audit)

The report says that the PCAOB is working to enhance its inspection program, and that part of that effort includes expanding the number of public company audits that it selects for review. Factors influencing the number of audits selected for inspection each year include prior inspection results and emerging risks relating to a particular audit firm or industry. The report says that the PCAOB’s staff will continue to apply an approach to selecting audits for review under which some are selected based on risk and some audits are selected randomly.

– John Jenkins