KPMG LLP’s Mexico affiliate missed the mark when testing controls, revenue, and accounts receivable in its most recent U.S. regulatory inspection.
The Public Company Accounting Oversight Board found violations in all three of the firm’s audits reviewed in 2018, according to triennial inspection results released Sept. 17.
Inspectors found that auditors with KPMG’s Mexico affiliate didn’t adequately test internal controls for financial reporting related to the allocation of revenue and to the value of accounts receivable. The firm’s auditors also failed to sufficiently test how the client recognized and tracked revenue.
The deficiencies suggest that the firm lacked the evidence...