Audit Team Backstops Fail to Catch Problems, Regulator Warns

Nearly half of all firms inspected by the US accounting oversight board in 2022 fell short in their efforts to review auditors’ work.

Under Public Company Accounting Oversight Board rules, firms must assign a partner to review the work of audit teams, serving as a backstop to ensure teams addressed key risks and documented their conclusions. Routine inspections have uncovered an increase in problems involving reviewers who failed to spot weak auditing or who lacked the expertise and independence required to serve in that role, according to a report board staff issued on Thursday.

• The number of ...