The Public Company Accounting Oversight Board (PCAOB) has published its staff inspection brief detailing information about the ongoing 2017 inspections of auditors of public companies.
In 2017, the PCAOB plans to inspect approximately 195 registered firms that audit public companies, of which 11 are subject to annual inspection. Among the 195 firms inspected in 2017, approximately 55 are non-U.S. firms in 26 countries or jurisdictions.
The key focus areas for the inspectors in 2017 are;
- Recurring audit deficiencies – such as assessing and responding to risks of material misstatement.
- Economic factors – Audit areas affected by recent economic developments such as the high rate of merger and acquisition activity and fluctuations in oil and natural gas prices.
- Financial reporting areas – that require significant judgment, including going concern considerations and income tax disclosures.
- Form AP requirements – An audit firm's compliance and implementation with new transparency rules and related amendments.
- Preparation for new accounting standards – for revenue recognition and lease accounting.
- Work by other auditors on multinational audits
- The auditor's use of information technology, particularly software audit tools
- The audit firm's system of quality control