ATLANTA, Oct. 15, 2015 /PRNewswire/ -- Mark Zyla, managing director of Atlanta-based valuation and litigation consultancy firm, Acuitas, Inc., today released the firm's "2015 Survey of Fair Value Audit Deficiencies," its fourth annual analysis of recent PCAOB inspections that indicates the current significant trends: 1) 43 percent of all audits inspected by the PCAOB in 2013 had deficiencies (compared to 16 percent in 2009) and, 2) the number of Fair Value Measurement (FVM) and impairment deficiencies as a percentage of the total continue to be significant, representing 31% of all audit deficiencies in 2013.
Two trends that began to emerge in last year's survey maintained their prominence. First, the FVM audit deficiencies attributable to mergers and acquisitions activity increased to 49 percent in 2013, up from 45 percent in 2012 and an average of 9 percent from 2008 to 2011. Second, the number of deficiencies caused solely by failures to assess risk and test internal controls remained high in 2013, at 45 percent of all deficiencies for the top 25 firms. By comparison, such failures were present in 22 percent of FVM deficiencies between 2008 and 2012.
According to Zyla, "We have seen a significant shift from the years where FVM deficiencies were largely the result of financial instruments to the current trend of business combinations and a failure to test or understand financial assumptions. This shift has likely been caused by audit improvements for financial instruments that resulted from the PCAOB inspection process and by increased merger activity in recent years. The auditing community should certainly be concerned about the continuing increase in deficiencies caused by a failure to assess risk and internal controls, and the PCAOB's assessment that they are caused by 'a lack of due professional care.'"
About Acuitas, Inc.'s Survey of Fair Value Audit Deficiencies
The Survey of Fair Value Audit Deficiencies is intended to assist financial statement preparers, auditors and valuation specialists in understanding the underlying causes of FVM and impairment audit deficiencies, as reported by the PCAOB in their latest inspection report. The information contained in the study is used to benefit public entities and their auditors, and by extension, private entities and their auditors.
The complete survey is available from Mark Zyla, a managing director of Acuitas, Inc., who can be reached at [email protected].
About Mark Zyla
Zyla is a managing director of Acuitas, Inc., an Atlanta-based valuation and litigation consultancy firm and is regarded as one of the country's leading experts on fair value. He has presented for the AICPA's key annual programs on fair value as well as having authored the leading book on the subject, "Fair Value Measurements: Practical Guidance and Implementation." Zyla has provided valuation consulting for various types of entities for the purposes of mergers and acquisitions, tax planning, corporate recapitalizations, as well as valuing various types of intellectual property and other intangible assets. His bio can be found online at www.acuitasinc.com/resume_mzyla.html.
SOURCE Acuitas, Inc.