Observations From the Target Team’s 2023 Inspections

This technical report presents the findings and observations from the PCAOB’s target team regarding inspections conducted in 2023. The target team focuses on emerging audit risks and has developed insights to enhance audit quality. The report outlines the team’s inspection procedures, which included reviews of audits related to crypto assets, multi-location audits, and significant or unusual events or transactions. Specific deficiencies identified during the inspections include insufficient procedures to address risks related to crypto asset transactions and inadequate evaluation of internal controls over financial reporting. The report also discusses the implications of these findings for audit firms and highlights good practices observed during the inspections. The target team’s flexible inspection approach allows for adjustments based on emerging risks, as evidenced by a shift in focus to interim reviews of certain banks in response to recent banking sector events. Overall, the report aims to inform auditors and stakeholders about the target team’s work and its impact on audit practices.