PCAOB staff releases two Spotlights

Crypto assets
A new PCAOB staff Spotlight highlights Inspection Observations Related to Public Company Audits Involving Crypto Assets. The publication discusses audit deficiencies in which the auditor failed to perform certain procedures in public-company audits of transactions involving crypto assets or crypto mining activities. Specifically, audit deficiencies were observed in the following areas:

• fraud and significant unusual transitions

• crypto asset ownership

• relevance and reliability of information used as audit evidence

• revenue recognition related to the transfer of crypto assets

• arrangements with mining pool operators

The publication also discusses control considerations in certain areas and includes best practices and reminders for auditors to consider when performing their audit procedures. The areas highlighted in the Spotlight are also useful considerations for management and audit committees.

Audit committee resource
The PCAOB staff has also issued Spotlight: Audit Committee Resource, which suggests questions that may be of interest to audit committee members to consider among themselves or in discussions with their independent auditors, particularly given today’s economic and geopolitical landscape. The Spotlight groups questions that audit committees may want to consider regarding the auditor’s work on areas including risk of fraud, risk assessment and internal controls, auditing and accounting risks, digital assets, merger and acquisition activities, use of the work of other auditors, talent and its impact on audit quality, independence, critical audit matters, and cybersecurity.
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