News & Insights

Auditor Liability Bulletin

May 5, 2023

PCAOB Updates Inspection Report Format


On May 2, 2023, the PCAOB announced updates to its inspection report format. The changes are intended to make inspection reports more useful to the public and to further drive audit quality. The updated format includes a new Part 1.C: Independence section and an expanded Part 1.B section that will include deficiencies related to AS 2401, Consideration of Fraud in a Financial Statement Audit, and AS 2110, Identifying and Assessing Risks of Material Misstatement. Reports will also now include additional commentary in Part 1.A for certain situations, including when an audit was the firm’s first audit of the issuer and when the firm had identified significant risks in areas in which the PCAOB identified deficiencies. Finally, the reports will include graphs showing firm and engagement partner tenure.

PCAOB Chair Erica Y. Williams discussed these changes in a keynote speech on May 4, 2023, at Baruch College’s 21st Annual Financial Reporting Conference. Ms. Williams also discussed the PCAOB’s 2023 inspection priorities, the PCAOB’s efforts in China, and other topics.

The PCAOB’s press release on the new inspection report format can be found here. The press release regarding Ms. Williams’s remarks, including a video of the event, can be found here.