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U.S. watchdog says auditors not doing their jobs much of the time

Dec 11 2012 Dena Aubin, Reuters

The biggest U.S. audit firms are failing to properly test some companies' financial controls, one of the main bulwarks against fraud, an audit watchdog group said on Monday. In a broad review of the "Big Four" and second-tier audit firms, the Public Company Accounting Oversight Board said problems are numerous and growing in audits of companies' internal controls - the main method used to keep accurate books. Tests of internal controls were among the requirements of the 2002 Sarbanes-Oxley Act, which Congress passed to curb abuses after accounting scandals at Enron Corp and other companies. The Act created the PCAOB to oversee audit firms. Controls can range from such simple procedures as checking purchase orders and invoices before making payments, to proper security procedures for computers, such as passwords and restricted access. Audit firms are required to test controls that could have an impact on financial statements and attest that the safeguards are adequate, but in

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