How audits fail in Significant Transactions
The recurring ways firms fell short. Click any one to read the real inspection findings.
- Accounting or disclosure treatment not evaluated16
The firm didn't evaluate whether the accounting or disclosures conformed with GAAP, or didn't identify departures from GAAP or omitted disclosures.
- Reliance on a specialist or pricing service11
The firm relied on a specialist, pricing service, or third party without sufficiently evaluating that work.
6 significant risk - Little or no substantive testing9
The firm performed little or no substantive testing over the account, disclosure, or assertion.
- Estimate assumptions not evaluated7
The firm didn't sufficiently evaluate the reasonableness of the significant assumptions behind an estimate.
4 significant risk - Journal entries / fraud procedures2
Deficiencies in testing journal entries or in responding to identified fraud risks.
- Management review controls not fully evaluated2
The firm tested a management review control but didn't evaluate the specific procedures the reviewer performed, or the control's precision.
1 significant risk - Estimate method, model, or data not evaluated1
The firm didn't evaluate the method, model, or underlying data the issuer used to develop an estimate or fair value.
- Accuracy/completeness of client data not tested1
The firm used issuer-prepared schedules, reports, or system data without testing that they were accurate and complete.
- Other testing deficiency1
A deficiency that doesn't fall into one of the more specific patterns above.