The Public Company Accounting Oversight Board released expanded versions of two reports it had originally issued in 2005 on two audit firms, highlighting problems with technical competence.
In the expanded versions, according to BNA Daily Tax Report, the PCAOB released reports on S.W. Hatfield, a sole proprietor in Dallas, and Laurence Rothblatt & Co., a four-person firm based in Great Neck, N.Y.
The PCAOB faulted Hatfield for not doing enough to ensure technical competence and the exercise of due care or professional skepticism. "The inspection team reported that the firm failed to perform adequate procedures to obtain reasonable assurance that financial statements are free of misstatement due to fraud," said the report. Hatfield did not appear to respond to the report.
Rothblatt was faulted for problems with technical competence, and the exercise of due care or professional skepticism. "The workpapers do not evidence that the firm performed the required communications with its client's predecessor auditor," said the report.
Rothblatt complained that "the inspection team's comment with respect to technical competence, due care and professional skepticism is vague and nonspecific." He noted that all of the firm's personnel comply with AICPA and New York State Education Department CPE requirements.
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