Question

Select 2 cases from the past 2 years and summarize:

- Which PCAOB auditing standards were violated?
- What should the auditors have done differently?
- Provide a link to the inspection reports you are referring to.

Answer 1

This response covers the general requirements of PCAOB auditing standards and what auditors should do to avoid violations, such as thorough testing and maintaining independence, but does not specify recent cases or provide inspection report links.

Step-by-step explanation:

Selecting cases and summarizing violations of PCAOB auditing standards require researching specific regulatory findings and reports which include details on what the auditors should have done differently. However, without current data, specific recent cases cannot be cited here.

Generally, in cases where PCAOB auditing standards are violated, auditors may fail to sufficiently test the accuracy of financial statements, maintain independence, or adequately assess and respond to risks.

For instance, auditors should rigorously test and verify the accuracy of financial statement assertions, maintain an objective and impartial position throughout the audit process, and carefully identify potential risks of material misstatement due to error or fraud, designing their audit procedures to address such risks. These actions ensure the audit is conducted in accordance with Professional Standards set by the PCAOB.

In the event of an audit failure, the PCAOB releases inspection reports detailing the nature of the violations and the actions that auditors should have taken to comply with auditing standards.