The Public Company Accounting Oversight Board (PCAOB) has released (May 4, 2010) its 2009 inspection report for Deloitte & Touche, LLP, and Deloitte’s response. The PCAOB is charged, under the Sarbanes-Oxley Act of 2002, with inspecting each of the largest audit firms each year, as well as smaller audit firms (with public company clients) once every three years (see Note A).
As a basis for this report, the PCAOB inspected aspects of 73 Deloitte audits, and finds 15 significant deficiences, for an apparent error rate of 21% (later on I’ll show that this is not a true error rate). In sharp contrast to its reaction to previous inspection reports, Deloitte says only, “We have evaluated the matters identified by the Board’s inspection team for each of the Issuer audits described in Part I of the Draft Report and have taken actions as appropriate in accordance with D&T’s policies and PCAOB standards.”
The Summa 