Public Company Accounting Oversight Board member Jay Hanson said he would like to see the PCAOB change the format of its inspection reports, including reducing the use of terms such as “audit failures.”

“I am troubled by the board's use of the term ‘audit failure’ in our reports,” Hanson said in a speech Tuesday at the CBI 10th Annual Pharma/Biotech Accounting & Reporting Congress in Philadelphia. “Our firm-specific inspection reports publicly identify inspection findings that are of ‘such significance that it appeared that the firm, at the time it issued its audit report, had failed to obtain sufficient appropriate audit evidence to support its audit opinion’ on either the financial statements or the effectiveness of internal control over financial reporting. In the context of a financial statement audit, for example, this would mean that the identified audit deficiency indicates that the firm did not do enough audit work and did not gather sufficient audit evidence to render its unqualified opinion that the financial statements are fairly stated. It does not necessarily mean, however, that those financial statements are misstated. Rather, it just means that the auditor did not do enough to know whether or not they were.”

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