The PCAOB has issued a staff inspection brief detailing the scope, focus, and objectives of its ongoing 2016 inspections of auditors of public companies and other issuers. Not surprisingly, fair value measurements are one of the key areas of inspection focus for the rest of 2016.
Hot seat: At the recent 11th Annual Fair Value Conference sponsored by the American Society of Appraisers and the University of Southern California Leventhal School of Accounting, George Wilfert, deputy director at the PCAOB, said that, while the number of audit deficiencies have recently decreased overall, the number of audit deficiencies regarding auditors’ testing of fair value measurements associated with business combinations has increased. Plus, there have been frequent deficiencies in evaluating impairment analyses for goodwill and other long-lived assets.
In 2016, the PCAOB plans to inspect approximately 210 registered firms that audit public companies, of which 10 are subject to annual inspection. Among the 210, approximately 60 are non-U.S. firms in 25 different countries.