US auditor watchdog criticizes PwC on quality control
The US regulator of corporate auditors criticized PricewaterhouseCoopers (PwC) on Thursday for not doing enough to ensure its audits were properly carried out, in a rare public reprimand of a major accounting firm.
The Public Company Accounting Oversight Board (PCAOB) faulted PwC for not promptly addressing quality control problems detected by the board in inspections of some 2007 and 2008 PwC audits, such as sub par supervision and review of audit work.
Only once before has the PCAOB made public a report criticizing quality controls at a Big Four audit firm. In October 2011, it faulted Deloitte & Touche LLP, a PwC rival, for not doing enough to promptly improve audit quality systems.
In a statement attached to the PCAOB report, PwC said it had taken steps to respond to the concerns, including improving audit tools and training. A spokeswoman for PwC declined further comment.
Thursday's report is not a disciplinary sanction and might not necessarily lead to discipline, the PCAOB said. However, the PCAOB can discipline firms and individuals for failing to comply with quality control standards, the board added.
Sanctions against auditors can include fines, suspensions and bars against auditing public companies. Even without further discipline, Thursday's report is a black eye for PwC, which touts its audit quality worldwide.
The rebuke came as corporate America showed increasing strength recovering from a credit crisis that rocked the economy, but amid lingering questions about the role of auditors that review corporations' books annually.
More than a decade after the PCAOB emerged from the regulatory backlash from
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