The Public Company Accounting Oversight Board (PCAOB) has found deficiencies in five audits conducted by Grant Thornton.

Grant Thornton failed "to identify or appropriately address errors in the issuer's application of GAAP," said the PCAOB, which acts as an audit watchdog and annually inspects accounting firms with more than 100 public-company clients.

Grant Thornton also did not perform certain audit tests to back up its opinions, the April 4 report said.

"In some cases, the deficiencies identified were of such significance that it appeared to the inspection team that the firm, at the time it issued its audit report, had not obtained sufficient competent evidential matter to support its opinion on the issuer's financial statements," the report said.

Grant Thornton failed to test the effectiveness of controls, data that had been provided to actuaries, and assumptions made by management, CFO.com reported. The inspection report does not name the audited companies, instead referring to them as Issuer A, B, etc. The inspection, conducted between April and December of last year, involved 14 of the firm's 50 offices.

Accountancy Age reported that the firm failed to adequately test the revenue and cost of revenue cycles and that it failed to test certain factors that the issuer had used in determining the fair value of stock options, for example.

In response, Grant Thornton said that it had performed additional procedures or added to its documentation after the inspections had ended, but, "None of the findings resulted in a change in our original overall audit conclusions or affected our reports on issuers' financial statements."

In addition the firm said, "We have already developed additional guidance, updated our policies where applicable, implemented expanded monitoring in some key areas and enhanced our training programs to address topics covered by the PCAOB's comments."