Ferguson: Audit Errors Showing Up More Often —WSJ CFO Journal

Are Deficiencies More Common?  Or is it Simply that PCAOB Now Successfully Targets Audit Areas Prone to Problems?

Emily Chasan at the Wall Street Jurnal’s CFO Report delivers the news that The Public Company Accounting Oversight Board has been catching an increased number of audit errors around fair value measurement this year, says PCAOB member Lewis Ferguson. He notes that audit regulators around the world have been finding issues with fair value measurement as well as auditor independence and going concern opinions. 

The rising number of audit deficiencies the U.S. auditor watch dog is catching in corporate audit inspections has provoked some anxiety, but it isn’t clear that audit quality can be fairly judged using that metric.

In a speech this week in China, Public Company Accounting Oversight Board member Lewis Ferguson said he was “disappointed” that the frequency of audit deficiencies has increased in the past two years. But it is possible that the increase has simply been caused by the PCAOB successfully targeting areas for audit that are likely to expose problems.

The PCAOB Pays Close Attention