The US oversight board has recommended auditors improve their quality control systems.
The Public Company Accounting Oversight Board (PCAOB) made the recommendations after it found auditors fell short of complying with auditing standards due to the pressures of the global financial crisis.
Compliance suffered particularly in areas such as fair value measurements, impairment of goodwill, indefinite-lived intangible assets, allowance for loan losses, off-balance-sheet structures, revenue recognition and inventory and income taxes.
The findings indicate that some auditors were less diligent in assessing and responding to emerging areas of risk when economic and business conditions changed.
The PCAOB said it will now also consider whether additional guidance is needed in relation to existing standards.
The report published by PCAOB covers aspects of the board’s inspections conducted during the 2007 to 2009 inspection cycles.