In 2012, there were 632 engagements inspected where the risk assessment standards were applicable. In 26% of those engagements, inspections staff found an audit deficiency related to one or more of those standards that contributed to an insufficiently supported audit opinion. That rate increased to 27% for the 848 engagements inspected in 2013. A preliminary analysis of 2014 inspection data indicates similar results.

The Board is concerned with the number and significance of deficiencies in compliance with these auditing standards. “Because risk assessment underlies the entire audit process, it is critical that audit firms address these findings of weaknesses in compliance with the risk assessment standards,” PCAOB Chairman James R. Doty said. A PCAOB spokeswoman was unable to say how many enforcement actions stemmed from these violations. The PCAOB lists many civil penalties it has levied, though they aren’t broken down by the standards violated. Those penalties are generally less than $10,000—sometimes as low as $1,000—and auditors can be disbarred for short periods of time.


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