Public Company Accounting Oversight Board

The information obtained included lists of the specific audit engagements the PCAOB planned to inspect, the criteria the PCAOB used to select engagements for inspection, and the focus areas of the inspections.

aggregate Part I.A deficiencies held steady at 26% in 2023 after previously jumping from 12% in 2020 to 16% in 2021 and 26% in 2022

It relates only to the audits inspected and is not a measure of the frequency of such deficiencies throughout all of the firm’s audits

For various reasons, inspection results are not necessarily comparable over time or among firms; and (4) Inspection reports are not intended to serve as overall rating tools.

In the typical case, information available to inspectors in relation to a firm’s deficient auditing is not sufficient for inspectors to form a judgment about whether there is an undetected material misstatement

Such an inspection finding does not necessarily mean that the financial statements are materially misstated (or that ICFR is ineffective).

the aggregate Part I.A deficiency rate decreased to 39% in 2024, down from 46% in 2023.

For the Big Four U.S. firms (Deloitte, EY, KPMG and PwC), which as of Dec. 31, 2024, collectively audit about 80% of the market capitalization of public companies, the aggregate Part I.A deficiency rate decreased to 20% in 2024, down from 26% in 2023.

There is established the Public Company Accounting Oversight Board, to oversee the audit of public companies that are subject to the securities laws, and related matters, in order to protect the interests of investors

The Board shall conduct a continuing program of inspections to assess the degree of compliance of each registered public accounting firm and associated persons of that firm

to provide to that issuer, contemporaneously with the audit, any non-audit service

As a result, Congress mandated in the Sarbanes-Oxley Act of 2002 that we study these issues.

In the aftermath of various financial scandals at large public companies such as Enron and WorldCom in the early 2000s, new legislation was passed to help restore investor

Although current concentration does not appear to be having a significant adverse effect, the loss of another large firm would further reduce large companies’ auditor choice and could affect audit fee competitiveness.