Update on Trends and Issues in Audits of Internal Control Over Financial Reporting

Date: Aug. 6, 2016
Speaker: Jeanette M. Franzel, Board Member
Event: American Accounting Association Annual Meeting
Location: New York City

On Saturday, August 6, I participated in a panel session on Internal Control over Financial Reporting (ICFR) at the Annual Meeting of the American Accounting Association (AAA) and used these slides.

The presentation provided an update on issues and trends in audits of ICFR and related PCAOB inspection findings. I presented similar information at the 2015 AAA annual meeting, which may be a helpful reference when reviewing the 2016 presentation. In my presentation, the views expressed are my own, and do not necessarily reflect those of the PCAOB Board or staff.

Below is a brief summary of the information provided in my 2016 slide presentation.

U.S. Big Four Firm Audit Deficiencies

Percentage of Adverse Internal Control Opinions

An auditor's opinion on a company's ICFR is "adverse" when the auditor reports at least one material weakness in ICFR, meaning that the company's ICFR was ineffective.

Financial Restatement Activity of Public Companies and Other Issuers with ICFR Opinions

[1] As part of the PCAOB's reorganization of its auditing standards, AS No. 5 was renumbered as AS 2201, effective Dec. 31, 2016. See PCAOB Release No. 2015-002.

View the presentation