Companies and their accountants faced "enormous challenges" that diminished the quality of audits as they tackled internal financial control assessments for the first time, the auditing profession's oversight board reported Wednesday.
The Public Company Accounting Oversight Board said experience should allow accountants to overcome the difficulties of the 2002 Sarbanes-Oxley corporate-governance law provision, which required auditor approval of internal financial controls in 2004 annual reports. The challenges included a shortage of trained staff at companies and audit firms, a tight timetable and limited resources.
The board put much of the responsibility on auditors and identified steps they could take to save time and money, such as focusing on "unique risk factors within each company" and relying more on the work of a company's internal auditors.
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