The 2020 inspection reports sprung a lot of surprises. PwC led the big4 firms with only 1 deficiency out of the 52 audits inspected. Deloitte had 2 deficiencies out of the 53 audits reviewed. The detailed summary of Part I deficiencies of audit firms is noted below:
Marked improvement by the big4 firms in 2020. Both PwC and Deloitte have only single digit deficiency. Appears that the firms improved audit quality drastically last year by being virtual.
PwC had just one exception in 2020. The report says the one exception was identified in the Industrials sector with revenues ranging from $10 to $50 billion. Refer to our blog on the S&P 500 companies audited by PwC. For the one exception, deficiencies were identified in revenue and inventory.
Deloitte’s two exceptions were in the Consumer Staples and Industrials sector. Deficiencies were identified in Revenue and Accounts receivable.
KPMG’s exception areas is noted below. Of the 5 audits reviewed, exceptions were identified in the expense area in 40% of them. Other major area of exception was Investment securities.
Would be interesting to read the next year’s report and see if similar percentages can be maintained by PwC and Deloitte.
