Internet Exercise: Public Company Accounting Oversight Board Inspection Reports. Refer to the website of the Public Company Accounting Oversight Board (PCAOB) (www.pcaobus.org ) and review the information under “ Inspections” and select the most current inspection report for one of the Big Four firms ( Deloitte, EY, KPMG, and PwC).
a. What information is contained in the “public” version of the PCAOB’s inspection reports? Is there any additional information that you would like to see?
b. What categories of practices, policies, and procedures are evaluated in the PCAOB’s inspection of the firm’s quality control system?
c. For the firm you selected, how many practice offices had audits inspected by the PCAOB?
d. For the firm you selected, for how many audits (issuers) did the PCAOB find deficiencies?
e. Identify five deficiencies that were cited in the PCAOB’s inspection report. For each deficiency, to which of the elements of the principles does it most closely relate? (If the firm had fewer than five deficiencies, evaluate all of the deficiencies identified in the report.)
f. Briefly summarize the firm’s response (if any) to the PCAOB’s inspection report.