PCAOB Expands Two Inspection Reports Over Unresolved Quality Control Issues

Key Takeaways

• The PCAOB publicly released one new inspection report for Deloitte & Touche S.p.A.
• (Italy) and expanded two previously issued reports for Eide Bailly LLP and Seligson & Giannattasio CPAs PC after the firms failed to remediate identified quality control deficiencies within the 12-month grace period.
• This action signals the PCAOB's continued enforcement of transparency requirements under Rule 4009(d) and highlights ongoing audit quality concerns at the named firms.

Deep Dive

This update reflects the PCAOB's routine but consequential process of monitoring auditor remediation efforts following inspection findings. Under PCAOB Rule 4009(d), when a firm's quality control (QC) criticisms identified in an inspection report are not satisfactorily addressed within 12 months, the PCAOB is required to make previously nonpublic portions of the report public. The expansion of reports for Eide Bailly LLP (originally issued January 25, 2024) and Seligson & Giannattasio CPAs PC (originally issued September 12, 2024) indicates that these firms did not adequately resolve the QC issues identified by PCAOB inspectors within the prescribed timeframe.

For compliance teams—particularly those at financial institutions, audit committees, and public companies that engage these firms—this development is a signal to reassess reliance on the named audit firms' quality control environments. While the specific substance of the unresolved QC criticisms is not detailed in this press release, the mere fact of escalation to public disclosure is a material red flag that should prompt deeper due diligence, including a review of the full expanded reports once available on the PCAOB's Firm Inspection Reports page.

Key timelines to note: the original reports were issued in January and September 2024, with the 12-month remediation window having lapsed before the PCAOB's decision to expand disclosure on July 22, 2026 (made public September 1, 2026). This reflects the standard PCAOB cadence of inspection, remediation period, and subsequent public disclosure if issues remain unresolved—a timeline compliance teams should track when evaluating third-party auditor risk.

Recommended actions include: (1) reviewing whether any of the firms named (Deloitte & Touche S.p.A. Italy, Eide Bailly LLP, Seligson & Giannattasio CPAs PC) serve as auditors for the organization or its subsidiaries/affiliates; (2) incorporating PCAOB inspection report status into vendor and auditor risk assessments; (3) monitoring the PCAOB's public database for further updates on these firms; and (4) engaging audit committees to discuss any implications for audit reliance or engagement renewal decisions. From a risk perspective, continued or repeated QC deficiencies at an audit firm can undermine confidence in financial statement reliability, increasing both financial reporting risk and reputational risk for entities relying on these auditors.

Source: Public Company Accounting Oversight Board