The big picture: On July 25, the Public Company Accounting Oversight Board published its Staff Update and Preview of 2022 Inspection Observations.
Why it matters: Monitoring the PCAOB’s activities is critically important for SEC registrants, as it provides a window into the board’s comprehensive inspections program and methodologies around evaluating quality control standards for auditing firms. The latest report highlights troubling trends in inspection results and sheds light on the PCAOB’s current areas of inspection focus.
By the numbers: The PCAOB expects that 40% of audits reviewed will have Part 1.A deficiencies, up from 34% in 2021 and 29% in 2020. Common deficiencies relate to internal control over financial reporting and audited financial statements.
Go deeper: In this Flash Report, we highlight some of the most notable areas the PCAOB underscored in the findings.