The chief auditor of the PublicCompany Accounting Oversight Board (PCAOB) told audit firms they need to do abetter job of keeping their clients on the straight and narrow and should pushfor potentially more expensive, forensic-like approaches to annual reviews offinancial statements, Financial Weekreports.
PCAOB Chief Auditor Thomas Ray,speaking last week, before a meeting of the American Institute of CertifiedPublic Accountants, said he expects audit firms to do more to find potentialfraud on corporate financial statements. “It’s essential that auditors maintainprofessional skepticism and that they follow up on red flags they find,” saidRay, a former partner with KPMG and Grant Thornton. “Auditors have to evaluatethe risk of fraud.”