backOn August 15, 2024, the PCAOB Division of Registration and Inspections Staff issued a Spotlight on its 2023 inspection activities. The Spotlight was issued in conjunction with the publication of the U.S. Global Network Firm’s 2023 inspection reports. In the Spotlight, the Staff noted that the aggregate deficiency rate at Big Four firms and certain other annually inspected firms has leveled off. Specifically, Part I.A. deficiencies for the Big Four firms was 26% in 2023, the same rate as in 2022. For U.S. Global Network Firms, the 2023 aggregate deficiency rate was 34% and there were two firms that the Staff characterized as “outliers” that increased the rate. For U.S. Non-Affiliate Firms inspected annually, the aggregate Part I.A. deficiency rate was 51% in 2023, but the Staff again noted there were “outliers” that were increasing the aggregate deficiency rate.
The Spotlight emphasized DRI’s enhanced inspection efforts in 2023 including that it (1) expanded the number of audits reviewed for certain annually inspected firms, (2) reviewed interim review procedures for 10 additional banks in response to the events in the banking sector, and (3) began a set of general inspection procedures. The Staff also noted it will be publishing a Spotlight specific to bank audits. The Spotlight also discussed common deficiencies in 2023 and noted there was a trend over the last three years of deficiencies in auditing ICFR. Finally, the Spotlight included reminders and best practices related to auditing long-lived assets, consideration of fraud, and revenue.
The Spotlight is available here.