A practice alert issued by the Public Company Accounting Oversight Board warns about a prevalence of deficiency in audits of internal controls. Defects can lead to flawed audits because auditors rely on internal controls to reduce substantive testing of financial-statement accounts and disclosure.
Jay Hanson, a member of the Public Company Accounting Oversight Board, said Tuesday that mandatory audit firm rotation faces so many significant obstacles that he struggles to see how the board would ever be able to require it. Hanson said at the AICPA Conference on SEC and PCAOB Developments that the obstacles include finding evidence that links firm tenure to audit failure, and showing that the benefits to such a requirement would outweigh the costs.
The Public Company Accounting Oversight Board has made progress with China on the issue of joint inspections of corporate audits, says PCAOB Chairman James Doty. The PCAOB has completed observations of Chinese regulators' inspections of auditors and Doty expects to begin talks on access to audit documents by the end of the year.
The Dubai Financial Services Authority and the Public Company Accounting Oversight Board have entered into a Statement of Protocol to facilitate the sharing of information. The deal is the first bilateral audit agreement for the DFSA since a change to the Dubai International Financial Centre's regulatory law paved the way for cooperation.