PCAOB inspections
When the PCAOB flags an audit of your company, or criticizes your auditor's quality control, the audit committee has to decide what that means for the financial statements and for the auditor relationship. SESGLO helps issuers assess the impact, scope any additional audit work and, where needed, carry out a successor or re-audit engagement under a fixed fee agreed in writing.
The PCAOB inspects registered firms: every year for firms that regularly issue audit reports for more than 100 issuers, and at least every three years for other firms (Sarbanes-Oxley Section 104). Inspectors select audits using both risk-based and random methods. When your audit is selected and deficiencies are found, the consequences can reach the company. This service is for:
The PCAOB's guide to its inspection reports explains how each report is organized:
| Part | What it contains | Public? |
|---|---|---|
| Part I.A | Audits where, in the inspectors' view, the firm had not obtained sufficient appropriate evidence to support its opinion on the financial statements and/or ICFR. Issuers are identified by letter, not by name. | Yes |
| Part I.B | Other non-compliance with PCAOB standards or rules, such as audit committee communications under AS 1301 or Form AP reporting. | Yes |
| Part I.C | Recent reports may include potential non-compliance with independence requirements. | Yes |
| Part II | Criticisms of, or potential defects in, the firm's system of quality control. | Only if not remediated in time |
Under Section 104(g)(2), Part II stays nonpublic if the firm addresses the criticisms to the Board's satisfaction within 12 months of the report date. If it does not, the PCAOB reissues Part II publicly. The PCAOB also notes that an audit deficiency does not necessarily mean the financial statements are materially misstated.
When an audit is cited, the auditor has to decide whether it can still support its opinion. Today that assessment is governed by AS 2901 (omitted procedures). If facts come to light that would have affected the report, AS 2905 applies. A replacement AS 2901, Responding to Engagement Deficiencies After Issuance of the Auditor's Report, is listed by the PCAOB as effective on December 15, 2026. Working with management and the audit committee, we help assess:
A re-audit is generally needed when the predecessor's registration has been revoked, when the firm has ceased operations and cannot reissue its report, or when significant restatement adjustments are involved. The SEC staff's Financial Reporting Manual, Topic 4 discusses each of these situations. Your securities counsel should confirm what must be disclosed and filed.
If the company changes firms, we follow the auditor change process: Form 8-K Item 4.01, Item 304 disclosures and the inquiries required by PCAOB AS 2610. We treat the inspection finding as a risk factor. Affected areas get more testing, opening balances in those areas get extra attention, and we do not rely on the predecessor's conclusions.
The PCAOB's resources for audit committees include further suggested questions. The PCAOB also says it reaches out each year to audit committee chairs at U.S. public companies whose audits it inspects.
These phases are illustrative. The actual sequence depends on the finding and will be confirmed in your written proposal.
We review the facts you can share, run independence checks and agree on the scope of the assessment.
We identify the affected areas, review the related records and brief the audit committee on the options.
A fixed-fee proposal for a successor audit, re-audit or targeted procedures, with a week-by-week plan.
Audit procedures, audit committee communications and report issuance on the agreed timetable.
All fees are fixed and agreed in writing before fieldwork. See how we price engagements. We do not publish fee ranges: schedule a meeting so we can evaluate your company and present a formal proposal.
The signing partner is involved from the first assessment to report issuance and takes part in audit committee discussions.
Our system of quality control is designed to meet PCAOB requirements. Read our quality control page. We do not promise inspection outcomes.
The fee, scope and week-by-week timeline are set out in the proposal. We reply to proposal requests within one business day.
English and Spanish engagement teams based in Guatemala City, working remotely with U.S. issuers. PCAOB Firm ID 7184.
To discuss a specific situation in confidence, write to info@sesglo.com.
FAQ
Not necessarily. The PCAOB states that an identified deficiency does not necessarily mean the financial statements are materially misstated or that there are undisclosed material weaknesses. It means the inspectors believe the firm had not obtained sufficient appropriate evidence to support its opinion. The auditor then has to assess the issue and may need to perform more work.
In Part I.A of the public report, the PCAOB identifies issuers by letter (for example, Issuer A) rather than by name. Audit committees therefore usually learn about findings on their own audit from the auditor. The PCAOB also says it reaches out each year to audit committee chairs at U.S. public companies whose audits it inspects.
Sarbanes-Oxley Section 104(g)(2) keeps criticisms of a firm's quality control system out of public view if the firm addresses them to the Board's satisfaction within 12 months of the inspection report. If it does not, the PCAOB makes Part II of the report public. This period applies to the firm's quality control system, not to individual audit findings.
No rule requires it. Many findings are resolved by the existing auditor performing additional procedures. A change may make sense if findings keep recurring, if the firm's registration is at risk, or if the audit committee loses confidence. Any change triggers Form 8-K Item 4.01 and the Item 304 disclosures, so it should be planned rather than rushed.
No. No audit firm can promise inspection results, and we do not. What we commit to in writing is the scope of work, the fee, the timeline and partner involvement from planning to issuance. Our quality control system is designed to comply with PCAOB standards, and inspections of our own work are carried out independently by the PCAOB.
The SEC staff's Financial Reporting Manual says that reports from a firm whose registration has been revoked may not be included in filings made on or after the revocation date. The periods it audited generally need to be re-audited by a registered firm before they appear in future filings. Securities counsel should confirm what the company needs to disclose.
Keep reading
A registration number is the starting point, not the answer. This guide shows CFOs and audit committees how to use the PCAOB's own public databases and SEC EDGAR to check a prospective audit firm before signing an engagement letter.
Changing auditors is routine, but the SEC disclosure rules are precise and the timing interacts with your 10-K and 10-Q deadlines. Here is the sequence, the filings and the traps.
There is no single price for a PCAOB audit. This guide explains what actually moves the fee, what a fixed-fee proposal should include, and how to benchmark what comparable companies pay using their own SEC filings.
