PCAOB Faults Deloitte on Audits

Regulator says firm failed to support assumptions in audits examined in 2007 inspection.

Deloitte & Touche LLP repeatedly failed to support assumptions in audits examined in a 2007 inspection, the Public Company Accounting Oversight Board said in the first public report of unresolved deficiencies involving one of the so-called Big Four accounting firms.

The firm’s quality controls and independence systems give “cause for concern,” the PCAOB said in its report, which was released today. The Washington-based nonprofit, created in 2002 to oversee audits of public companies after the collapses of Enron Corp. and WorldCom Inc., gives audit firms at least a year to fix deficiencies and only releases the reports in cases where auditors fail to make sufficient improvements.

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