In July 2023, the Public Company Accounting Oversight Board published a report that highlights common areas of audit deficiencies for public companies. Private companies face similar challenges when reporting their financial results. The report identified seven key financial statement concerns: 1) revenue and related accounts, 2) inventory, 3) information technology, 4) business combinations, 5) long-lived assets, 6) goodwill and intangible assets, and 7) allowances for loan and lease losses. Another emerging area of concern is cryptocurrency transactions. As audit season approaches, expect external auditors to focus on these high-risk areas.
