According to Helen Munter, director of the Division of Registration and Inspections at the Public Company Accounting Oversight Board (PCAOB), the largest public accounting firms made significant improvements in their audits of internal controls over financial reporting (SOX 404).  The improvements came as audit firms increased guidance and training for internal control audits, and demanded more proof from companies that internal controls were working. Internal control over financial reporting consists of systems and processes that deter corporate fraud and financial misstatements.

Deloitte & Touche LLP, was the first of the large accounting firms to have its 2014 inspection report released by the regulator this week. Deloitte’s report showed just 21% of audits inspected by the PCAOB had deficiencies — the lowest level in the past five years for the firm. However, the inspection report still cited several deficiencies in internal control audits, such as the auditor failing to properly test internal controls over billing rates and revenue.

For details, read the following article on the WSJ

http://blogs.wsj.com/cfo/2015/06/04/big-firms-getting-better-grades-on-internal-control-audits-pcaob/

 

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