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Top 10 Audit Deficiencies

SEC Enforcement Actions: 1987-1997

1.	Gathering sufficient audit evidence	80%
2.	Exercising due professional care	71%
3.	Demonstrating appropriate level of professional skepticism	60%
4.	Interpreting or applying requirements of GAAP	49%
5.	Designing audit programs and planning engagement	44%
6.	Using Inquiry as a form of audit evidence	40%
	(relying too much on this method)
7.	Obtaining adequate evidence related to the evaluation of significant	36%
	management estimates
8.	Confirming accounts receivable	29%
9.	Recognizing/disclosing key related parties	27%
10.	Relying on internal controls	24%
	(rely too much/failing to react to known control weaknesses)

MARK S. BEASLEY, JOSEPH V. CARCELLO and DANA R. HERMANSON: “Top 10 Audit Deficiencies SEC Enforcement Actions: 1987-1997”