EY Backpedals on Evaluation After Inspection Violations (1)

Ernst & Young LLP reversed its opinion on the effectiveness of internal controls for one of its clients after audit violations were detected during the firm’s 2017 regulatory inspection.

The Public Company Accounting Oversight Board released the firm’s 2017 inspection results Oct. 2.

Inspectors found audit deficiencies in 17 out of 55 audits reviewed, two more than cited in the firm’s 2016 review.

The largest U.S. audit firms are inspected annually as part of the PCAOB’s efforts to ensure that investors can rely on public companies’ financial statements. PCAOB inspections typically focus on the highest-risk audits and the most ...