PCAOB Staff Report Shares Observations To Help Auditors With Testing of Information Produced by Companies and External Sources
Apr 18, 2024
On April 18, 2024, the Public Company Accounting Oversight Board (PCAOB) released a new staff Spotlight report, “Inspection Observations Related to Auditor Use of Data and Reports. The Spotlight is aimed at improving auditor understanding of how to properly test (1) information produced by the company and (2) information from external sources.
The report states that company-produced information (like invoices or IT system reports) and external information (like customer purchase orders or bank records) are critical in audits. In the 2021 and 2022 inspection cycles, around 17% of audited firms had deficiencies due to inadequate procedures for testing the accuracy and completeness of this information.
To improve audit quality, the Spotlight highlights:
- Common audit deficiencies
- Good practices
- Other reminders that may improve auditor understanding of how to properly test IPC and information from external sources.
Access the Spotlight report on the PCAOB’s website.
