PCAOB plan for 2006 audit firm inspections
02 May 2006
The US Public Company Accounting Oversight Board has released a statement regarding its approach to inspections of the independent auditing firms' audits of internal control over financial reporting.
Those inspections will begin this month.
The PCAOB said its inspectors will evaluate:
- the degree to which the audit of internal control over financial reporting and the audit of financial statements were performed as a single, integrated and mutually reinforcing process;
- whether auditors use a top-down approach in which company-level controls were identified as the first step in planning the audit;
- whether auditors properly assessed risk and used a risk-based approach to determine the nature, timing, and extent of internal control testing; and
- whether auditors took full advantage of the opportunities available to use the work of others, such as the company's internal audit staff.