The Public Company Accounting Oversight Board (PCAOB) released a report that says auditors are not doing a good enough job in following audit risk assessment standards. Specifically, the PCAOB report said that it had found numerous deficiencies in registered audit firms' implementation and compliance with Auditing Standards 08 through 15, which concerns assessing, planning for, and responding to risk during the source of an audit during its 2012-2014 inspections. 

The PCAOB report says that, of the 632 engagements inspected in during the 2012 period, 26 percent had an audit deficiency connected in some way to at least one of the standards concerning audit risk, a number that increased to 27 percent for the 848 engagements inspected in the 2013 period. Some of the more common deficiencies include: 

• Failing to perform substantive procedures specifically responsive to fraud risks and other significant risks identified;
• not evaluating the accuracy and completeness of financial statement disclosures; and 
• not testing the accuracy and completeness of information produced by the company.

"Because risk assessment underlies the entire audit process, it is critical that audit firms address these findings of weaknesses in compliance with the risk assessment standards," said PCAOB Chairman James R. Doty.