PCAOB 2023 Fourth Quarter Recap
Public Company Accounting Oversight Board (PCAOB)
The PCAOB oversees the audits of public companies and SEC-registered brokers and dealers.
This recap presents key PCAOB developments and news for the fourth?quarter of 2023. For more on the PCAOB’s work to protect investors, please sign up for updates here.
On October 25, the Board announced that George R. Botic was sworn in as a Board Member. The U.S. Securities and Exchange Commission (SEC) conducted the swearing-in ceremony virtually.
In 2023, the PCAOB made significant progress to accomplish our strategic goals and carry out our investor-protection mission. To highlight our progress, we launched a series of short videos featuring highlights from our work in 2023.
Watch and share the videos:
On December 12, Chair Erica Y. Williams testified before the House Financial Services Subcommittee on Capital Markets regarding the PCAOB’s mission and agenda.
On December 13, Chair Erica Y. Williams appeared before the SEC’s Open Commission Meeting regarding the PCAOB’s 2024 budget.
Enforcement
On November 30, the Board announced three settled disciplinary orders sanctioning three China-based firms and four individuals for violations of the U.S. securities laws and PCAOB rules and standards. ? As the PCAOB took historic enforcement actions against China-based firms in 2023, Chair Williams’ said, “The days of China-based firms evading accountability are over.”
Watch and share the video on how the PCAOB is holding China-based firms accountable:
Standard Setting and Rulemaking
During the year, the Board took more formal actions on standard setting and rulemaking than any year in the previous 10 years, issuing four proposals and adopting a final confirmation standard and related amendments that had previously been stalled since 2010.
Inspections
On December 20, PCAOB inspectors outlined their priorities for 2024 inspections in a PCAOB staff report. The report highlights key risks, like high interest rates, and other considerations, like audit areas with recurring deficiencies, that auditors should be focused on when planning and performing audit procedures. It notes that the PCAOB will continue to prioritize inspections of financial-services sector audits, digital assets, and more.
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On October 12, a new report from the staff of the PCAOB revealed that 42% of firms the Board inspected in 2022 had a quality control criticism related to engagement quality reviews (EQRs), up from 37% in 2020.
A new staff report provides observations from the PCAOB’s target team, a group of inspectors who focus on emerging audit risks and other topics.
Engagement
PCAOB 2023 Conference on Auditing and Capital Markets Attracts 359 Participants from Across Academia
On October 6, the PCAOB concluded its two-day 2023 Conference on Auditing and Capital Markets, held in Washington, DC. Open to academics and Ph.D. students, the research conference attracted 359 participants this year.
Discussion topics at the October 10 meeting included Overview of PCAOB Enforcement and Investigations, IAG Presentation to the Board on Firm and Engagement Performance Metrics, IAG Recommendations to the Board on Critical Audit Matters.
Discussion topics at the November 2 meeting included Emerging Issues in Auditing Subcommittee Discussion, Auditing Inventories, and Use of a Service Organization.
On November 8, the PCAOB concluded its two-day 2023 International Institute on Audit Regulation, in Washington, DC. Established by the PCAOB in 2007, the event offers regulators from around the world a chance to discuss issues related to auditor oversight, audit quality, and investor protection. Attending the Institute this year were nearly 90 officials from audit regulators in 35 non-U.S. jurisdictions, as well as officials from several international organizations.
PCAOB Personnel Announcement
On December 19, the PCAOB announced the appointment of Pamela C. Dyson as its Chief Information Officer (CIO), effective immediately. As CIO, Ms. Dyson serves as the Director of the PCAOB’s Office of Data, Security, and Technology (ODST), reporting to the PCAOB’s Chief Operating Officer.
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Sr. SOX Compliance Analyst | Financial Services Compliance | Self Published Author
6 个月Is is possible that the sampling could be larger for these major entities? Also, the peer reviews should be more timely. Meaning, at minimum a year behind.
PhD (Gold Medallist) | Insolvency & Valuation Expert | Chartered Accountant | CEO, 4Line Legal & Compliance | Finance & Tax TV Anchor | Founder Myna Healthcare Trust & Lighthouse Old Age Home | Lord Jagannath Devotee
1 年I have seen the report that PCAOB also sanctioned KPMG Assurance and Consulting Services LLP (“KPMG India”) and KPMG India engagement partner from PCAOB Portal. The PCAOB sanctioned KPMG India and Partner for a deceptive practice of signing off on blank work papers, creating a misleading audit trail and undermining investor trust. This transgression warrants further scrutiny by the Institute of Chartered Accountants of India (ICAI) and the National Financial Regulatory Authority (NFRA) to ensure accountability and deter future misconduct. The PCAOB's findings, highlighting KPMG India's lax quality control lapses, must prompt proactive responses from ICAI and NFRA. These responses should include: Thorough investigations into KPMG India's audit practices and potential breaches of ethical codes. Disciplinary action against individuals involved, including Partner, commensurate with the gravity of the offense. Mandating stricter internal controls at KPMG India to prevent similar violations. Remedial measures to restore investor confidence in the Indian audit market. https://pcaobus.org/news-events/news-releases/news-release-detail/imposing-7-7-million-in-fines-pcaob-sanctions-three-firms-four-individuals-kpmg-global-network
Financial Executive for US Based Manufacturing, Logistics and Technology Companies.
1 年In the marketplace, the recap is more auditors have left the marketplace, audit costs have increased, the mid-market and smaller issuers have less selection (if they are able to find auditors at all), and more work is done by overseas accountants. Congratulations on a job....done. I know government agencies never have any accountability, but Iowa yesterday shows us that people are fed up. The administrative state will be deconstructed- and the PCAOB will be part of this deconstruction.
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1 年Amazing work!