Public Company Accounting Oversight Board (PCAOB) inspectors have detailed 2023 inspection priorities, noting the focus would be audit risks related to fraud, financial services, and crypto.
“Increased deficiencies in 2021 inspections and increased comment forms in 2022 inspections revealed a troubling trend in audit quality, which we are tackling head-on in 2023,” PCAOB Chair Erica Y. Williams said. “By staying ahead of new and emerging risks, our inspections plan will hold firms accountable and drive improvements in audit quality for investors.”
According to the 2023 inspection plan, the document covers the review of 2022 fiscal year-end audits.
“Our inspection program is designed to review portions of the selected audits of public companies and broker-dealers and to evaluate elements of a firm’s QC (quality control) systems,” the inspectors wrote in the plan overview. “Our 2023 inspection plan considered overall business risks present in 2022. A few of these business risks included disruptions in supply chains; volatility in financial and commodity markets due to such things as inflation; interest rates; and currency fluctuations.”
PCAOB inspectors will expand the number of audits to be reviewed for certain annual firms. For approximately 90 percent of the selected audits, the agency plans to perform a traditional review, typically over two to three financial statement focus areas and additional review procedures, as done in prior years.
“For the remaining 10 percent, we plan to perform tailored review procedures, where we will generally choose one focus area of the audit to review,” the inspectors wrote.