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.
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