Title

Analysis of Peer Review Reports: A Focus on Deficiencies of the Top 20 Triennially Inspected Firms

Department

Accountancy

Document Type

Article

Publication Date

2009

Abstract

This descriptive study analyzes deficiency data disclosed in peer review reports of the AICPA's Center for Public Company Audit Firms Peer Review Program (CPCAF PRP). We analyze the reports of the largest 20 triennially inspected firms that have both a PCAOB inspection report and a CPCAF peer review report. The CPCAF focuses on audits of non-public companies, while the PCAOB focuses on public company audits. Our analysis identifies a number of interesting points. First, about 60 percent of the reports issued by the CPCAF and PCAOB identify at least one deficiency. Second, both CPCAF and PCAOB reports highlight the pervasiveness of insufficient documentation. Third, other common deficiencies in the CPCAF reports relate to incomplete or inaccurate management representation letters, incomplete financial statements and inaccurate audit reports, incomplete performance of analytical procedures, and insufficient review procedures.

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