The U.S. Public Company Accounting Oversight Board (PCAOB) was established by the Sarbanes-Oxley Act of 2002, to oversee the financial statement and internal control audits of companies with securities registered with the U.S. Securities and Exchange Commission. Firms performing such audits must be registered with the PCAOB and are routinely inspected to assess the degree of compliance by the firm with the applicable PCAOB audit requirements. The inspection process includes a review of certain aspects of selected audits to identify whether deficiencies exist with respect to those aspects of the audits, and whether such deficiencies indicate defects in the firm’s system of quality control over audits. The inspection process does not include an evaluation of the financial statements or internal controls of the companies whose audits were selected for inspection.
The PCAOB completed a periodic inspection of PricewaterhouseCoopers Kyoto in February 2013, and consistent with its historical practice, released certain portions of its related inspection report (the Report) on March 12, 2014. In Part 1 – Inspection Procedures and Certain Observations of the Report, the PCAOB identified instances where we did not complete certain audit procedures in accordance with the related requirements. We carefully evaluated each of these findings and immediately undertook appropriate actions as required under both PCAOB standards and our own policies. In no instance did we consider it necessary to revise our conclusions on the companies’ previously issued financial statements or internal controls. Additionally, no restatements of previously issued financial statements were required.
The Firm’s leadership and its partners maintain a strong commitment to audit quality and we will continue to make investments to enhance the quality of our audits. Specific actions we have taken and will continue to take to include:
We appreciate the input received from the inspection process and look forward to continuing our dialogue with the PCAOB with respect to our mutual objective of enhancing audit quality.
Yukihiro Matsunaga, Managing Partner
Toru Tamura, Assurance Leader
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