PCAOB report shares observations to help auditors with testing of information produced by companies and external sources

The Public Company Accounting Oversight Board (PCAOB) has issued a new staff Spotlight report titled "Inspection Observations Related to Auditor Use of Data and Reports." This report focuses on enhancing auditor understanding of proper testing methods for information produced by companies (IPC) and information from external sources. IPC examples include invoices, shipping documents, and data from company IT systems, while external information encompasses items like customer purchase orders and bank records. The report addresses findings from the 2021 and 2022 inspection cycles where about 17% of audited instances showed deficiencies in auditors' testing procedures for IPC and external information. To boost audit quality, the Spotlight outlines common audit deficiencies, shares best practices, and provides reminders to help auditors effectively assess the accuracy and completeness of these information sources.

The report can be found here.

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