The Public Company Accounting Oversight Board
(PCAOB) found faults in 15 of the 73 audit inspections carried out
on Deloitte US.
The PCAOB said Deloitte failed to obtain
sufficient competent evidence to support its opinion on the
issuer’s financial statements or internal control over financial
reporting in several inspected audits.
Examples of the deficiencies included:
– A failure to give sufficient weight to
relevant evidence that was more objectively verifiable;
– A failure to sufficiently evaluate the
effect of certain events on its assessment of the potential
impairment of goodwill at year end;
– A failure to perform adequate audit
procedures to test the valuation of an issuer’s inventory and
investments in joint ventures (the primary assets of which were
– A failure to adequately test the
valuation of an issuer’s inventory and its investments in
unconsolidated entities (the primary assets were inventory
– A failure to adequately test an intangible
asset for impairment.
In a written response to the PCAOB, Deloitte
said it has evaluated the matters identified by the board’s
inspection team for each of the issuer audits and taken appropriate