PCAOB Flags Increased Number of Audits at Crowe Horwath

According to Compliance Week, after several years of improvement, Chicago-based Crowe Horwath (FY17 net revenue of $809.5 million) saw an increase in adverse findings in its latest regulatory inspection.

The PCAOB examined parts of 15 different audit files at Crowe Horwath during its 2016 inspection and found problems in five of them for a 33% deficiency rate. In its 2015 inspection of the same firm, the board noted problems with only three of 14 audits, or 21%. That rate was the lowest for Crowe Horwath and for the eight largest audit networks that year, Compliance Week reported.

The PCAOB said that its 2016 review of all five of Crowe Horwath’s audits revealed problems with the audit of internal control, but only two of the five also contained errors in the audit of financial statements. In total, PCAOB found 20 different mistakes.

“The firm had the greatest difficulty with testing the design or operating effectiveness of controls selected for testing and with checking the accuracy and completeness of reports or data produced by the issuer,” Compliance Week reported

In a letter attached to the report, Crowe Horwath says it has taken action to address each of the concerns raised in the inspection. “While we are pleased with the overall trend of improvement in our inspection results over the past several years, we are not content with the level of deficiencies in the 2016 report,” says Mark Baer, MP of Crowe Horwath’s audit services group. “We will continue to use this constructive feedback to enhance our audit processes, procedures and training.”