Responding to corporate complaints, the PCAOB says inspections of audit firms this year will examine whether audits were cost-effective and properly focused on controls that posed the greatest risks.
Did audit firms use more judgment and fewer checklists when auditing internal controls last year? And were audits cheaper as a result? The Public Company Accounting Oversight Board announced Monday that inspections of public accounting firms, which begin in May, will focus on whether firms paid attention to earlier PCAOB warnings and guidance about overboard audits.
Those warnings were issued a year ago, after a roundtable on Section 404 of the Sarbanes-Oxley Act, sponsored by the Securities and Exchange Commission, in which public company executives complained vigorously about rigid and overreaching audits.
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