61%

PCAOB deficiency rate at non-affiliated firms — the #1 mistake is circular auditing

ISA 520 — Analytical Procedures Inspection Readiness Diagnostic

11 deficiencies regulators flag most often. Diagnose your methodology in under 5 minutes.

The PCAOB is replacing its 35-year-old analytical procedures standard because firms keep getting it wrong. 61% of non-affiliated firms had deficiencies. BDO was flagged for five consecutive years. The #1 mistake? Circular auditing — and most auditors don't realise they're doing it.

What's inside

3-sheet Excel workbook with 11-question interactive diagnostic, finding details with regulator quotes and ISA references, and a regulatory landscape snapshot dashboard covering PCAOB and IAASB simultaneous standard revisions.

1. Expectation built from prior year audited figures — circular auditing (ISA 520.5)

The auditor's expectation must be developed independently from the recorded amount. Using prior year audited figures, client budgets, or management data as your expectation means you are auditing management's numbers against management's numbers.

2. Threshold for investigation not set before performing the procedure (ISA 520.7)

Auditors performed analytical procedures without determining in advance what amount of difference from the expectation would require investigation, making the procedure subjective and unauditable.

3. Investigation of differences limited to management inquiry (ISA 520.7)

When analytical procedures revealed unexpected differences, auditors accepted management's verbal explanations without obtaining corroborating evidence.

Plus 8 more findings — including a regulatory landscape snapshot covering PCAOB and IAASB simultaneous standard revisions. All in a free Excel workbook.