Financial Accounting News

Audit Firms Still Struggle With Assessing, Testing for Risk

Aug. 9, 2018, 9:20 PM

Weak risk assessments by auditors is a common cause of deficiencies uncovered during routine inspections, according to one official with the U.S. audit regulator.

If auditors can’t identify risks in how companies report financial information, they can’t design the correct tests to see if the clients have the proper controls in place, said Glenn Tempro, associate director of the Public Company Accounting Oversight Board’s division of registration and inspections.

“When we see audit deficiencies, in many cases we’re able to link it back up to some type of failure of the firm’s risk assessment,” Tempro said during an Aug....

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