In this Alert we bring to your attention the PCAOB’s:

Key recurring areas of concerns include:

  • Auditing internal control over financial reporting;
  • Assessing and responding to risks of material misstatements;
  • Auditing accounting estimates, including fair value measurements; and
  • Cross border audits.

New Risks the PCAOB is monitoring which include:

  • Increase in mergers and acquisitions;
  • Falling oil prices;
  • Undistributed foreign earnings; and
  • Maintaining audit quality while growing the other business

The above areas of concern and new risks emanate from the deficiencies observed by the PCAOB during the audit firm inspection process and therefore warrant the attention of the
Audit Committees. These are then phrased into questions that Audit Committees should find answers for from their External Auditors.

Nkonki Inc is confident that if South African Audit Committees can ensure that these questions are included in their list of information to understand from their external auditors, the oversight capability and the monitoring of their assurance providers would be greatly enhanced.

Download:

Alert 3: PCAOB – Questions Audit Committees should ask their External Auditors