backOn March 31, 2025, the PCAOB Division of Registration and Inspections Staff issued a Spotlight on its 2024 inspection activities. The Spotlight was issued in conjunction with the publication of the Global Network Firms’ 2024 inspection reports. The Spotlight emphasized that DRI observed noticeable improvements in 2024.
In the Spotlight, the Staff noted that the aggregate deficiency rate for certain annually inspected firms has declined. Specifically, Part I.A deficiencies for the Big Four firms decreased from 26% in 2023 to 20% in 2024. For all U.S. Global Network Firms, the aggregate deficiency rate decreased from 34% in 2023 to 26% in 2024. Part I.A deficiencies at annually inspected Non-Affiliated Firms decreased from 53% in 2023 to 52% in 2024.
The Spotlight highlighted common deficiencies DRI identified relating to auditing ICFR, auditing financial statement areas, complying with PCAOB standards or rules, and complying with independence obligations. DRI also provided data regarding areas with recurring deficiencies over the last three inspection cycles. The Spotlight also identified examples of common quality control criticisms that related to testing controls, reliance on data, supervision of the audit, engagement quality review, and policies for financial holdings disclosures.
By publishing inspection reports for GNF firms in March, the Board published the inspection reports five months earlier than last year when it published annually inspected firm reports in August.
The Spotlight is available here.