PCAOB Transitions for the Future
Further to my previous post, Chairman Duhnke’s speech on May 17, 2018 to the 2018 Deloitte/University of Kansas Auditing Symposium offers several insights into the new strategic direction of the PCAOB. A central theme of his speech is that “many firms appear to have ‘plateaued’ in their progress toward achieving improved inspection results” and that the current PCAOB inspection process may need substantial changes. He suggests that the “thematic review” approach by the U.K’s Financial Reporting Council (FRC) and the Dutch Authority for Financial Markets (AFM) may be a way to improve the inspection process and better achieve the goal of improving audit quality. He also states that the PCAOB is “considering what improvements we can and should make in our other oversight programs.” This includes a look at PCAOB enforcement as follows: (1) whether the Division of Enforcement and Investigations (DEI) is pursuing the “right mix” of enforcement cases; (2) whether DEI is pursuing and the Board adjudicating cases in a timely manner; and (3) whether the Board is imposing effective and appropriate remedies in cases. A frequent concern voiced by both auditors and the Board is the lengthy time for investigating and adjudicating PCAOB cases.
