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The head of the US audit regulator has warned that hybrid practices and offshoring could undermine the quality of accounting firms’ work.
Erika Williams, chairwoman of the Public Company Accounting Oversight Board, told accountants at a conference in Washington on Tuesday that the collapse of traditional apprenticeships risks creating problems that will haunt auditors throughout their careers. .
Her warning came after the PCAOB issued a report on audit firm culture a year ago, concerned about a sharp increase in deficiencies in auditing firms’ audit practices.
“When deficiencies are found in a wide range of auditing areas, it may be that the firm’s culture fosters and prioritizes the professional skepticism and caution necessary to conduct the audit,” Williams said at an International Association of Certified Public Accountants event. I’m starting to doubt that.” .
“Those we interviewed said remote and hybrid work environments have impacted apprenticeship models for on-the-job training, cultural dissemination, and professional skepticism.”
Williams also pointed to the trend of sending basic audit work offshore or to centralized “shared service centres.” “The promotion of shared service centers is depriving companies of basic skills and experience,” said some audit firm officials interviewed for the PCAOB report. “A lack of experience in basic audit skills can create additional challenges for these individuals as they continue in their careers.”
PCAOB inspectors have found deficiencies in more than two-fifths of the audits they’ve examined over the past two years, and Williams has previously said that disruptions caused by the pandemic could be the cause, but they can be forgiven. He suggested that it shouldn’t be done.
On Tuesday, he defended the PCAOB’s work from critics who say it has been too aggressive with experts, saying this year’s inspections have shown significant improvement. Under her leadership, the agency imposed more fines on auditing firms and created new, tougher auditing standards, sometimes opposed by the Big Four.
President-elect Donald Trump is expected to take a soft stance toward U.S. regulators as a whole when he returns to the White House in January, asking the head of the Securities and Exchange Commission, which oversees the PCAOB, to be a long-time critic of the PCAOB. Nominated Paul Atkins. Some critics have even argued that some or all of the PCAOB’s operations should be transferred to the SEC.
“The PCAOB and SEC share a common mission to protect investors, and we believe investors are best protected when each brings their unique resources and expertise to the table,” Williams said. Ta.
