In recent months, several companies have changed their auditors due to various reasons, including mergers, policy shifts, and committee decisions. Notable changes include Potbelly Corporation appointing KPMG LLP after dismissing Deloitte and Wayfair Inc. replacing Ernst & Young LLP with PricewaterhouseCoopers LLP. Transparency in auditor relationships is crucial for businesses.
The integration of Generative AI in auditing enhances financial audits through improved risk assessment and fraud detection. The Big Four firms—Deloitte, PwC, EY, and KPMG—leverage AI-driven tools to increase efficiency and accuracy. However, challenges such as data reliability and regulatory concerns highlight the need for human oversight alongside technological innovation.
The Public Company Accounting Oversight Board (PCAOB) in September, 2024 imposed sanctions on five audit firms for violations related to audit committee communications and failure to report disciplinary actions, highlighting ongoing concerns about audit transparency and compliance.
Deloitte audits 21% of the total companies across all sectors in S&P 500. This significant market presence underscores Deloitte’s reputation and reliability in the auditing industry. Deloitte audits 28% of the companies in the Financials sector, which includes major players like MetLife Inc. and Morgan Stanley.
The PCAOB’s 2023 inspection of Ernst & Young LLP (EY) revealed that out of 59 audits inspected, 22 had Part I.A deficiencies. This was a slight improvement from 2022, where 25 out of 54 audits had deficiencies. In 2021, 12 out of 56 audits had Part I.A deficiencies.
Deloitte earlier this week reported its global revenues for FY2024. Global revenues rose to $67.2 billion, an increase of 3.6% in dollar terms.
SEC registered companies are required to file form 8-K, item 4.01 notice in the event of a change in auditors. We analyze auditor changes for each month looking into auditor change and its reason.
PCAOB is the regulator for audit firms and it routinely reviews the audit work of firms registered under them. PCAOB reviewed 57 audits performed by PwC in 2023 and the deficiency was 18%.
The Indian accounting landscape is primarily regulated by the Institute of Chartered Accountants of India (ICAI). The ICAI sets standards and guidelines for accounting and auditing practices. As of recent estimates, India has over 400,000 Chartered Accountants (CAs).