The PCAOB has released its inspection report on CPA firm Grant Thornton covering the period from May 2006 through January 2007. Audits of eight companies were examined.
Several audit deficiencies are noted in the report, such as a failure to identify or appropriately address errors in the application of GAAP in the selected audits, including errors that seemed likely to be material to financial statements. In addition, the PCAOB notes that it appeared that certain necessary audit procedures were not performed, or at least were not properly documented.
The PCAOB concluded that in certain instances, Grant Thornton did not obtain competent evidential matter to support its audit opinion. There are also instances of the accounting firm not obtaining corroboration of managements explanations.
Grant Thornton has issued a letter in which it responds to the charges made in the inspection report, stating, "We strongly disagree with the use of overly broad comments such as 'failed to identify,' 'failed to perform,'" wrote Grant Thornton. "They do not adequately describe all of the relevant facts nor do they acknowledge the extent of the procedures that were, in fact, performed by the engagement teams."
You can read the PCAOB inspection report on Grant Thornton.