PCAOB Targets 650 Audits

The audit oversight board will pore over 500 audits churned out by the Big Four and 150 produced by the second-tier accounting firms.
Stephen TaubJune 25, 2004

The Public Company Accounting Oversight Board (PCAOB) plans to review about 650 audits of public companies this year.

The watchdog of public-company-auditing forms will look at auditor independence and such non-audit help as tax services, “in the post-Sarbanes-Oxley environment,” PCAOB Chairman William McDonough said in remarks prepared for delivery to the House Financial Services Committee’s Subcommittee on Capital Markets, Insurance and, Government-Sponsored Enterprises. The board also plans to hold a July 14 forum on tax services and auditor independence.

The PCAOB will examine 5 percent of the audits completed by the four biggest accounting firms–PricewaterhouseCoopers, Deloitte & Touche, Ernst & Young, and KPMG (in order of size). That amounts to roughly 500 audits.

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The board will also review 15 percent of the audits prepared by the next four biggest firms: Grant Thornton; BDO Seidman; Crowe, Chizek & Co., and McGladrey & Pullen. That accounts for another 150 audits.

The PCAOB will also dig in to small-firm audits on a case-by-case basis, McDonough added. Further, he reiterated what he said was his commitment to convergence of global accounting standards. “International convergence on high-quality standards is an important objective,” he stated.