PCAOB Inspection Report Card

An Improved Grade on Timeliness

Helen M. Roybark, PhD, EdS, CPA, CFE

The Sarbanes-Oxley Act (SOX) requires the Public Company Accounting Oversight Board (PCAOB) to conduct inspections of each registered public accounting firm. Audit deficiencies that exceed a certain significance threshold are summarized in the public portion of the PCAOB's inspection reports. Critics have called for more timely disclosure of its inspection reports—but has the PCAOB improved its reporting by issuing its inspection reports in a more timely manner? The results of the author's analysis show that while time lags for issuing its inspection reports still need to be reduced, the PCAOB has made significant progress in its reporting responsibilities under SOX section 104 (Responding to an Adverse Report—A Checklist for the Audit Committee) during the past two years.