The Public Company Accounting Oversight Board released a report Monday in which it identified widespread problems at eight major accounting firms with their audits of internal control over financial reporting.
The report is the first full review of how well firms are complying with Auditing Standard No. 5: “An Audit of Internal Control over Financial Reporting that is Integrated with an Audit of Financial Statements,” which was adopted in 2007. In 46 of the 309 engagements inspected in 2010, or 15 percent, the firms failed to obtain sufficient audit evidence to support their ICFR audit opinions due to one or more deficiencies in audits of 2009 financial statements. Of those engagements, 32 had two or more deficiencies.
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