Sounding a familiar warning, the Public Company Accounting Oversight Board criticized Ernst & Young and KPMG for failing to follow accounting rules or gather sufficient evidence for judgments in a number of audits.The board issued similar complaints about the work of PricewaterhouseCoopers and Deloitte last year. The reports are based on inspections done in 2005 of the firms' audits of companies' 2004 financial results. The PCAOB singled out 10 E&Y audits for criticism, while citing KPMG for deficiencies in 11 audits.
PCAOB Chairman Mark Olson has acknowledged criticisms from investors and members of corporate audit committees that the agency is taking too long in getting the reports out to the public, and said that the process will be sped up in 2007.
The full public reports are available online at www.pcaob.org/inspections/public_reports/index.aspx.
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