PCAOB Staff Report Highlights Inspection Observations in SPAC and De-SPAC Audits

On April 19, 2023, the PCAOB staff published a report setting forth its observations in its inspections of audits involving companies that were special purpose acquisition companies or were formed through de-spac transactions.  The report asserts that many such companies restated their financial statements to reclassify warrants issued during IPOs as a liability (rather than as equity).  The report also describes the areas of focus during inspections of these audits.