The Year of the Ampersand Part I: Completeness & Accuracy, Relevance & Reliability

In 2014, Denver Eater published an article: What’s in a Name: The Year of the Ampersand. Essentially, for the foodies out there, in 2014, it seemed all new, trendy restaurants used the ampersand (yes, the “&” symbol) to link two words (sometimes entirely unrelated) together and then suddenly, voilà, you had yourself the next hottest restaurant. In Denver, top of mind are Stoic & Genuine, Work & Class, Guard & Grace, and Williams & Graham, to name a few.

In an entirely different industry (arguably less exciting), the same naming trend seems to be picking up heat today. It’s almost impossible to talk about audit without using the words “completeness & accuracy” or “relevance & reliability.” Whether supporting teams on PCAOB inspections or performing in-flight reviews, these paired words seem to surface time and again. In fact, in October 2021, the PCAOB published guidance specifically addressing this topic: Staff Guidance – Insights for Auditors – Evaluating Relevance and Reliability of Audit Evidence Obtained From External Sources.

Quantity & Quality (there’s that ampersand again)

Information technology is enabling the aggregation of more and more data as well as allowing access to these vast sums of data. The more data, the more evidence and thus logic would dictate, the better the audit. However, we’re all familiar with the concept of “fake news” and so, it’s important to evaluate the quality of that information.

As with almost everything related to an audit, it all starts with risk assessment. As the risk increases, so too does the quantity and the quality of the audit evidence needed to address the risk. In its publication, the PCAOB stated:

The concepts of sufficiency and appropriateness of audit evidence are interrelated – the quantity of audit evidence needed is affected by both the risk of material misstatement (in the audit of financial statements) or the risk associated with the control (in the audit of internal control over financial reporting) and the quality of the evidence (i.e., its relevance and reliability).

Quantity is often driven by the nature, timing and extent of procedures. Quality is driven by the relevance and reliability of the information obtained or used in those procedures. Relevant information but from an unreliable source doesn’t hold much value for the auditor. Similarly, reliable information that is irrelevant renders audit evidence useless.

Factors to Consider

Relevance

The PCAOB states: The relevance of audit evidence refers to its relationship to the assertion or to the objective of the control being tested and depends on the design and timing of the audit procedure.

Essentially, how well does the evidence pertain and/or relate to the assertion being tested? For instance, if an auditor is using industry data to corroborate management’s assumptions, how comparable are the companies underlying the industry data? If you’re auditing a start-up company, pulling information from long-established Fortune 500 companies may not be relevant information.

How disaggregated is the data? Often, the more disaggregated data is, the more relevant it becomes since you can select the data that is most pertinent/similar.

Another factor when considering relevance of data is its age. Typically, current data is more relevant than data from a decade ago. However, it really all depends. Arguably, data from 2020 (the year of COVID) may not be the most relevant data to represent “typical” operations. So perhaps 2019 is more relevant than 2020. Similarly, if we were to have another global pandemic in 2030, well, then the data from 2020 (even if it’s ten years old) may be the most relevant data since it would show how companies fared during a global pandemic (which has not been a common occurrence).

Reliability

As it relates to reliability, the PCAOB states: The reliability of audit evidence depends on the source and nature of the evidence and the circumstances under which it is obtained.

Source of information

When considering the source, consider the expertise and reputation of the source of the data. We inherently do that ourselves when we read the news: headlines from NPR are generally more trusted than the sensational scandals reported by grocery store tabloids. The same concept applies to audit evidence. Factors that might increase the reliability of the source include regulatory oversight and statutory mandates and reporting. US Banks, for instance, are generally accepted as providing reliable information given the incredibly stringent regulatory environment. Finally, auditors need to consider conflicts of interest. A research study on the effects of leaded gasoline funded by the manufacturers of lead additives is a clear conflict of interest (and yes, this was the case for years when cars used leaded gasoline). Obviously, auditors need to consider the source of information and the potential relationship to the company being audited.

In addition to analyzing each source, the more sources that can be obtained, generally, the more reliable the information becomes. For instance, if a company is using a market multiple approach to determine the enterprise value of a company, the more multiples that can be obtained (assuming they’re all relevant), the more reliable the information becomes.

Nature of information

Once the source has been vetted, the auditor must consider the nature of the information being obtained. To the extent the information is “raw data” that has not been manipulated, it is considered more reliable. As data is aggregated, manipulated, and/or synthesized, the data becomes less reliable (given the increased risk of error). However, data that has been reviewed or subject to some sort of “attestation” would inherently become more reliable.

How information is obtained

Auditors should also consider how information is obtained. External data obtained directly by the auditor is more reliable than data provided by a client. Further, the more complex the process to obtain the data, the less reliable it becomes as there is greater risk of error.

Ultimately, all of these factors need to be considered in combination. And there are likely many other factors that could impact relevance and reliability. While no single factor renders information relevant or reliable on a standalone basis, I would caution that one single factor could render the information irrelevant and unreliable.

As auditors consider these factors and review data from various sources, it’s important to maintain professional skepticism. To the extent inconsistent data or contradictory evidence surfaces, the auditor needs to evaluate this; you can’t just ignore it.

Most of the time, it’ll be a matter of professional judgement, so document these considerations.

Difficulties with Relevance & Reliability

In working with teams on various audit quality initiatives, there have been a few sources of frustration that perpetually surface: availability of external data, ability to audit external data, and inconsistent application of the “guidance” above.

Availability of external data

While information technology has made it generally easier to access data, there are some companies that operate in largely “uncharted” territory. Many of my clients who audit start-up companies struggle to find “comparable data” in these emerging industries; there just isn’t any historical data, often because the other start-ups are so small and/or private and it’s a brand new product. In these cases, there just isn’t a lot of information to obtain. For the limited information that is available, auditors often struggle to conclude on the relevance and reliability of that information. For instance, if there is only one public competitor that launched a similar product ten years ago, given the guidance above (single source with ten-year old data), arguably, the information is no longer relevant. But if that is the ONLY information available, it’s the most relevant. I’ve seen these cases time and again and the best thing I can advise is to document all considerations.

Ability to audit external data

Sometimes, external data is available, but how can an auditor really assert completeness and accuracy of that information? The auditor has the ability to audit the client, but there’s no guarantee that a client has contractual rights to audit external information (say, from its customers). Take software services. I’ve worked with many clients who audit software companies. Sometimes the revenue is generated through use of the software. Sometimes the client has insight to that usage. Other times, it must rely on the customer to report usage in order to bill for revenue. Given the auditor cannot necessarily go out and audit these customers, how can the team really assert completeness and accuracy?

In its publication, the PCAOB states: …[W]e understand that some firms are considering using as audit evidence new information from nontraditional external sources that has become available because of the advances in information technology. To determine the nature and strength of any relationship between this information and the company’s transactions, and to substantiate conclusions reached, the auditor may need to perform additional procedures (e.g., correlation or regression analyses). The PCAOB seems to indicate analytics may be sufficient. The key is that “additional procedures” need to be performed. Again, this will come down to risk, professional judgment, and documentation.

Inconsistent application of the “guidance”

What is frustrating, perhaps, is the inconsistency with which the guidance seems to be applied, or the implicit expectations that have formed over time through inspection findings. Take the example above: AR confirmations (from customers) are considered best practice to obtain comfort over the existence of AR; in fact, it’s required under PCAOB auditing standards. However, in a recent audit inspection, the PCAOB challenged the use of a customer-provided list of revenue transactions indicating the team had failed to test the completeness and accuracy of that information. Why is an AR confirmation considered relevant and reliable but a list of revenue transactions from the customer not? Obviously, it’s more complicated than just that, but it seems inconsistent.

Or take another example: bank confirmations and similarly, bank statements (which include cash transaction history), are generally accepted as relevant and reliable audit evidence. It’s external data from a third party that is highly regulated. All that makes sense and is in line with the PCAOB’s recent guidance. However, let’s go to the broker-dealer industry. Talk about regulation! This industry arguably has just as much oversight and regulatory reporting as banks. Clearing firms act very similar to a bank (in fact, they often are a part of banks) except they deal in securities, which then clear in cash. Although very similar, through my experience supporting clients with broker-dealer inspections, the PCAOB appears to have different expectations asking engagement teams if they obtained a SOC 1 report (which provides reliance over the controls in place at a service provider) over the clearing broker. Why is a bank generally accepted as providing complete and accurate information without the need for controls testing but a clearing broker requires a SOC 1 report for its information to be considered C&A? Again, it’s more nuanced than that, but this also seems inconsistent.

I think this is starting to surface more and more within the PCAOB and that’s partly why they issued this guidance. It’s becoming a very hot topic.

Moral of the Story

Ultimately, the PCAOB is trying to get firms to understand that getting data is one thing, but there is still more work to be done (and documented). Sometimes, the relevance and reliability is incredibly obvious. Sometimes it’s not as clear.

Regardless the frustrations, perhaps the key is to document the considerations to evidence that the engagement team considered the relevant factors and to capture IN WORDS the professional judgment exercised at the time of the audit. As long as audits incorporate professional judgement, so too will PCAOB inspections incorporate professional judgment. And so, the only way to defend your position is to ensure it was documented at the time of the audit. And when you think you’ve documented enough, add more.

As is the way with any trend, the “AMPERSAND” naming convention seems to be coming to a close. Sadly, one of my favorite restaurants, Church & State in LA, closed its doors in 2019. In Denver, Beast + Bottle closed its doors during the pandemic. And so it goes. But unlike restaurants, the trend in auditing is not going to fade away. Rather, I anticipate the concepts of “completeness & accuracy” and “relevance & reliability” will only become more critical concepts.

In fact, the rise of AI and data analytics threatens to automate much of the audit profession and will disrupt the industry as we know it. Maybe my role will be obsolete in 15-20 years as traditional auditing may go by the wayside, but it will be entirely predicated on the concept that data is complete, accurate, relevant and reliable. Hopefully by then, I’ll be in retirement running a cozy little bed and breakfast which of course will be called “C&A, R&R.” To former auditors, it’ll be an homage to “Completeness & Accuracy, Relevance & Reliability,” but to everyone else, it’ll simply be known as “Cocktails & Accommodations, Rest & Relaxation.”

About Johnson Global Advisory

Johnson Global partners with leadership of public accounting firms, driving change to achieve the highest level of audit quality. Led by former PCAOB and SEC staff, JGA professionals are passionate and practical in their support to firms in their audit quality journey. We accelerate the opportunities to improve quality through policies, practices, and controls throughout the firm. This innovative approach harnesses technology to transform audit quality. Our team is designed to maintain a close pulse on regulatory environments around the world and incorporate solutions which navigate those standards. JGA is committed to helping the profession in amplifying quality worldwide.

Visit www.johnson-global.com to learn more about Johnson Global.

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Jackson Johnson Appointed to AICPA & NASBA International Qualifications Appraisal Board (IQAB)

June 8, 2026

Johnson Global Advisory is pleased to announce that Jackson Johnson, CPA, President, has been appointed to serve on the AICPA & NASBA International Qualifications Appraisal Board (IQAB). The IQAB is responsible for evaluating international accounting qualifications and facilitating mutual recognition agreements between the United States and other countries, helping to support global mobility and consistency in professional standards. “It’s an honor to serve on the IQAB and contribute to efforts that strengthen the global accounting profession,” said Johnson. “As the profession continues to evolve, collaboration across jurisdictions is critical to maintaining high standards and enabling greater mobility for accounting professionals worldwide.”

AI Governance Belongs in the Boardroom, Not the Server Room

May 20, 2026

Few technologies have generated as much excitement—and as much promise—for accounting firms as artificial intelligence (“AI”). The potential to streamline audit execution, reduce hours, and enhance firm profitability is real and already being realized. However, AI does not simply change how audits are performed; it fundamentally alters how firms must think about oversight, responsibility, and quality management. As regulators sharpen their focus on AI‑enabled audits, firm leadership must move beyond adoption and address a more complex challenge: establishing clear and scalable AI governance. This article outlines why AI governance is now a strategic imperative for accounting firm leadership. As discussed in JGA’s article What Regulators Expect to See When AI is Used , inspectors do not evaluate AI tools in isolation. They evaluate whether the engagement team obtained sufficient appropriate audit evidence, exercised professional skepticism, and applied appropriate supervision and review when AI was used. Those expectations are grounded in existing auditing standards and apply regardless of whether AI was used for risk assessment, testing, or documentation support. Against that backdrop, AI governance is not simply about approving tools or managing technology risk. It is about ensuring the firm’s system of quality management supports consistent, supervised, and well-documented use of AI that aligns with audit objectives and withstands inspection scrutiny. When firms treat AI as an IT matter, governance discussions tend to center on 1) Data security, 2) System access, 3) Vendor due diligence, and 4) Infrastructure controls. Those topics matter—but they are only the baseline. Inspectors do not evaluate whether AI systems are well engineered; they evaluate whether AI enabled audit work complies with standards, supports professional judgment, and is governed within the firm’s system of quality management. In short, AI governance is a firmwide audit quality issue, not a back office technology function. Using AI does not change the auditor’s responsibilities. Requirements still apply when AI is used for 1) Audit evidence, 2) Professional skepticism, 3) Supervision and review, 4) Engagement partner accountability and 5) Firm level quality controls. From an inspection standpoint, AI introduces new audit quality risks, including: Over reliance on automated outputs Reduced professional skepticism (automation bias) Inconsistent application across engagements Insufficient documentation of judgment Lack of transparency around how conclusions were reached These are not IT risks—they are audit quality risks. AI Touches Nearly Every Component of a QC System Under modern quality management frameworks (including PCAOB QC 1000 , AICPA SQMS No. 1, IAASB ISQM 1), AI affects nearly every component of a firm’s QC system, not just technology or data governance.

Joe Lynch, JGA Shareholder, to Present at 41st Midyear SEC Reporting & FASB Forum in San Francisco

May 20, 2026

Johnson Global Advisory ("JGA") is proud to announce that Joe Lynch, Shareholder, will be speaking on a panel at the 41st Midyear SEC Reporting & FASB Forum . Joe will deliver the PCAOB update on June 5, with attendance available both in person and virtually. This panel will summarize the activities of the PCAOB including: Recite new requirements for the lead auditor’s use of other auditors Anticipate the new standard, “The Auditor’s Use of Confirmation” Enumerate the new requirements of QC 1000, “A Firm’s System of Quality Control” Recall the guidance of the new auditing standard “General Responsibilities of the Auditor in Conducting an Audit” Understand the amendments addressing aspects of audit procedures that involve technology-assisted analysis of information in electronic form Learn about the proposal to replace existing auditing standards related to an auditor’s use of substantive analytical procedures Anticipate other Standard-Setting and Research Projects Summarize PCAOB inspection findings and enforcement activities Understand recent PCAOB publications, including: Spotlight Publications Audit Focus Publications Data Points Publications Click here to register and learn more. Johnson Global partners with leadership of public accounting firms, driving change to achieve the highest level of audit quality. Led by former PCAOB staff, JGA professionals are passionate and practical in their support to firms in their audit quality journey. We accelerate the opportunities to improve quality through policies, practices, and controls throughout the firm. This innovative approach harnesses technology to transform audit quality. Our team is designed to maintain a close pulse on regulatory environments around the world and incorporates solutions which navigates those standards. JGA is committed to helping the profession in amplifying quality worldwide.

JGA Response to PCAOB Request for Comment on Strategic Priorities

May 15, 2026

Johnson Global Advisory (JGA) has submitted its response to the PCAOB’s request for input on its 2026–2030 strategic priorities. Drawing on extensive experience supporting firms subject to PCAOB oversight, JGA’s comments emphasize a more modern, risk-based approach to regulation focused on audit quality, scalability, and transparency. View JGA's comments here. Johnson Global partners with leadership of public accounting firms, driving change to achieve the highest level of audit quality. Led by former PCAOB staff, JGA professionals are passionate and practical in their support to firms in their audit quality journey. We accelerate the opportunities to improve quality through policies, practices, and controls throughout the firm. This innovative approach harnesses technology to transform audit quality. Our team is designed to maintain a close pulse on regulatory environments around the world and incorporates solutions which navigates those standards. JGA is committed to helping the profession in amplifying quality worldwide.

Monitoring and Remediation: Turning Engagement Deficiencies Into System Improvement

April 28, 2026

In our work with firms, we have seen a clear shift in how monitoring and remediation are viewed under modern quality management frameworks. They are no longer treated as retrospective compliance exercises. Instead, engagement deficiencies are increasingly used as meaningful inputs into an ongoing, risk-based system designed to identify issues early, address them thoughtfully, and reduce the likelihood of recurrence. Regulatory messaging reinforces this evolution. Oversight bodies are signaling a shift in focus from isolated engagement outcomes and more on whether firms have a system of quality management that consistently detects quality risks, responds appropriately, and demonstrates that remediation is working in practice. Based on our experience, while individual engagement deficiencies remain important, the more critical question is becoming how firms analyze, respond to, and learn from those issues over time. Engagement Deficiencies Are Signals, Not Endpoints Engagement deficiencies can surface through many channels, including pre-issuance reviews, internal inspections, post-issuance reviews, peer reviews, and regulatory inspections. Regardless of source, firms benefit most when these findings are evaluated through a consistent quality management lens. In practice, we encourage firms to look beyond whether a single engagement fell short . The more meaningful consideration is whether the deficiency points to potential weaknesses in governance, methodology, training, supervision, resourcing, or monitoring activities. We often observe that when issues are quickly labeled as engagement-specific, without assessing whether they reflect broader quality risks, valuable insight is lost. Modern quality management frameworks are designed to use these signals to strengthen the system, not simply close individual findings. What Effective Monitoring and Remediation Looks Like in Practice Firms that navigate this environment effectively tend to apply a disciplined and repeatable approach when deficiencies are identified. Based on our experience supporting firms across a range of practice areas, several elements consistently make a difference: Assess whether the issue may be systemic Recurring observations across engagements, service lines, or time periods often indicate system-level risk. Similar documentation gaps, inconsistent application of methodology, or supervision challenges rarely arise in isolation. Perform meaningful root cause analysis Effective root cause analysis typically moves beyond surface explanations. Firms benefit from evaluating whether policies and procedures were designed appropriately, implemented as intended, and supported by sufficient training, time, and resources. Design remediation that directly responds to the quality risk Remediation is most effective when it is clearly linked to the underlying risk. Depending on the circumstances, this may include enhancements to methodology, targeted training, revised review requirements, or changes to engagement acceptance, staffing, or oversight processes. Validate remediation through timely monitoring Implementing corrective actions is only part of the process. In our experience, firms are most successful when they also confirm that remediation operates as intended. Follow-up monitoring performed early enough to prevent recurrence is a critical component of this step. Failure to validate remediation remains one of the most common and consequential weaknesses we observe across firms. Case Study: When Remediation Is Not Validated In one situation we encountered, a firm identified engagement deficiencies through post-issuance reviews. The issues mirrored observations that had previously been noted during peer review and were communicated as having been addressed by the group responsible for report issuance. However, responsibility for validation was not clearly assigned, and no follow-up procedures were performed to evaluate whether the revised processes were effective. Subsequent post-issuance reviews, triggered by an organizational change, revealed that similar and additional deficiencies had re-emerged. From a quality management perspective, this was not an engagement execution failure. It reflected a breakdown in monitoring and remediation. The firm had information indicating quality risk but did not adjust its monitoring activities to confirm that remediation was working. Viewed through a system lens, this represents a system-level deficiency rather than an isolated engagement issue. Quality Management Applies Across All Engagement Types Modern quality management frameworks apply across a firm’s assurance and attestation practice, including private company audits, public company audits, SOC engagements, nonprofit audits, and other services. Deficiencies identified in any practice area may signal broader weaknesses in: Governance and leadership Methodology and training Monitoring activities Remediation processes In our experience, firms struggle to maintain an effective system of quality management when certain practices are treated as exempt from system-level evaluation. Key Takeaways Engagement deficiencies are inputs into the system, not endpoints. Recurring issues often indicate systemic quality risk. Remediation should be validated, not assumed. Monitoring activities should evolve as risks emerge. Quality management applies across all engagement types. Firms that treat monitoring and remediation as a continuous feedback loop, rather than a periodic exercise, are typically better positioned to improve engagement quality and respond to evolving regulatory expectations. Looking for an independent perspective on whether engagement deficiencies have been fully addressed? Based on our experience working with firms across assurance and attestation practices, Johnson Global Advisory supports clients by performing independent reviews, validating remediation efforts, and strengthening monitoring processes. If you would like support refining policies, training, workflows, or documentation standards, or would benefit from an objective assessment ahead of regulatory, peer, or internal inspections, contact your JGA audit quality advisor to discuss your needs.

What Regulators Expect to See When AI Is Used

April 28, 2026

Artificial intelligence (“AI”) is no longer experimental in public company audits. From risk assessment and scoping decisions to population testing, anomaly detection, and documentation support, AI enabled tools are increasingly embedded in audit execution and workflow. As use expands, the auditor’s core obligations do not shift to the technology, they remain with the engagement team. If AI is used to inform judgments, influence the nature, timing, or extent of procedures, or summarize and interpret information, auditors must still demonstrate that they obtained sufficient appropriate audit evidence and applied professional skepticism throughout. In practice, auditors must understand what the tool is doing, confirm that inputs are complete and accurate, and evaluate whether the outputs are reliable and fit for purpose in the specific audit context. While the auditing standard devoted solely to AI have not been issued, our experience is that inspectors have been increasingly direct—through staff publications, questions from inspectors in the field, and public remarks—about what they expect to see when AI is used. The expectations are grounded in existing standards and longstanding inspection focus areas: audit evidence, supervision and review, professional skepticism, and firm quality control (now quality management). In other words, AI does not create a “new” audit; it amplifies the need to show your work. Firms that treat AI as a “shortcut”, rely on outputs that cannot be explained or reproduced, or fail to govern and document how tools were selected, configured, and monitored are inviting new risks to support their audit conclusions. Conversely, firms that can clearly articulate the purpose of the tool, how it aligns to audit objectives, how inputs and outputs were validated, and how experienced personnel supervised and challenged the results will be far better positioned during inspection. The table below summarizes what inspectors typically expect to see documented when AI is used in a public company audit. Firms can use these themes to evaluate whether their engagement documentation tells a complete story that an experienced auditor (and an inspector) can follow from objective, to procedure, to results, to conclusion.

Audit Documentation: From Low-Hanging Fruit to Load-Bearing Standard

March 30, 2026

In a previous article, Back to Basics: Audit Documentation Failures Have Become Dangerous Low Hanging Fruit , we highlighted how audit documentation had quietly re-emerged as a source of regulatory risk after years of relative deprioritization. While PCAOB Auditing Standard 1215, Audit Documentation (AS 1215), has historically been cited less frequently than other standards, our direct experience from recent inspection activity, enforcement actions, and internal inspection results, demonstrate that documentation failures are increasingly treated as indicators of deeper execution, supervision, and quality management breakdowns. In today’s environment, audit documentation is no longer merely a record of work performed. It is the primary evidence inspectors rely on to evaluate whether an engagement was properly planned, executed, and supported at the time the auditor’s report was issued. What has been low-hanging fruit now requires firms to close these gaps and transform them into a load-bearing foundation for audit quality. From Rare Enforcement to Systemic Inspection Risk AS 1215 establishes clear requirements regarding what must be documented, when documentation must be completed, and how engagement files must be assembled and retained. As discussed in our prior article, failures to comply with these requirements were historically viewed as technical or secondary issues, often resulting in inspection comments rather than enforcement action. That distinction is no longer meaningful. Recent enforcement actions involving backdating, improper (both intentionally, and inadvertent) modification of workpapers, and failure to timely assemble a complete audit file reflect an evolving regulatory view. Documentation failures do not simply violate procedural requirements; they call into question the credibility of the audit opinion itself. More importantly, beyond enforcement, documentation deficiencies are increasingly cited as core inspection findings. Inspectors are challenging situations where engagement teams assert that work was performed but cannot demonstrate that work within the archived file. In these cases, the absence of timely, complete, and clear documentation is no longer treated as a formality. It is treated as evidence that the engagement may not have been properly executed, supervised, or supported in accordance with PCAOB standards. This represents a fundamental shift. Documentation is no longer “low-hanging fruit.” It is a systemic inspection risk that cuts across execution, supervision, and firm-level quality management. From Misconduct to Execution Failures Pervasive documentation failures that do not involve intentional misconduct but still result in non-compliance are increasingly observed. For example, reviewer signoffs occurring near the documentation completion date, rather than contemporaneously with the performance of audit procedures, raise questions about whether effective supervision occurred during the audit or was deferred to meeting archiving deadlines. Similarly, engagement teams may assert that key judgments can be explained verbally, even when those judgments are not clearly documented in the audit file. In today’s environment, the distinction between “we can explain it” and “it is clearly documented” is critical. If procedures, judgments, and conclusions are not evident in the documentation itself, inspectors increasingly conclude that the work was not performed in accordance with PCAOB standards. The issue is not whether the engagement team can explain what they did after the fact. The issue is whether the archived documentation allows an experienced auditor, with no prior connection to the engagement, to understand the procedures performed, evidence obtained, and conclusions reached at the time of the auditor’s report. When documentation fails to reach that standard, inspectors are increasingly concluding that the audit itself was not properly executed, regardless of intent. This reflects an important shift. Documentation failures are no longer viewed primarily as misconduct. They are viewed as symptoms of execution breakdowns, including delayed supervision, compressed review cycles, and audit workflows that defer documentation until the end of the engagement. As a result, AS 1215 has become a direct proxy for how audits are actually performed in practice. How the 14-Day Documentation Completion Requirement Changes the Risk Profile The execution risks are further amplified by the PCAOB’s shortened documentation completion timeline. Recent amendments to AS 1215 reduce the timeframe to assemble a complete and final audit file from 45 days to 14 days after the report release date. While this change may appear procedural, its implications are operational. Under this accelerated timeline, engagement teams no longer have a meaningful post-issuance window to resolve review notes, complete documentation, or finalize supervisory evidence. What were once viewed as “clean-up” activities are now more likely to result in timing violations and non-compliance. This shift places increased emphasis on: Contemporaneous documentation Real-time supervision Realistic workload and staffing models Audit Documentation as a Cornerstone of Audit Quality Audit documentation has long been described as low-hanging fruit in the inspection process. That characterization no longer reflects its role in today’s regulatory environment. Documentation now serves as the primary lens through which regulators assess whether an engagement was properly executed, supervised, and supported. With shortened timelines, expanded quality management expectations, and increased regulatory scrutiny, firms can no longer treat documentation as a downstream activity. It must be embedded into how engagements are planned, staffed, reviewed, and completed. In an environment where inspection conclusions are driven by what is, and what is not, in the audit file, strong documentation is not merely defensive. It is foundational to audit quality. At Johnson Global Advisory , we support firms in selecting, implementing, and optimizing these tools to meet their unique needs. For more insights, visit our blog or contact us to learn how we can help your firm AmplifyQuality®. For more information, please contact your JGA audit quality expert .

Accounting Firm Acquisitions: Why Due Diligence and Integration Determine Long-Term Success

March 30, 2026

Mergers and acquisitions within the accounting firm industry continue to accelerate, driven by succession planning needs, technology investment, talent constraints, geographic expansion, and the pursuit of new service lines. The pace and volume of transactions is being fueled, in large part, by private equity investment in the accounting firm space. Yet as deal activity accelerates, so does a critical reality: the long term success of an acquisition is determined well before the transaction closes—and long after the announcement is made. Experience across the profession shows that insufficient due diligence and poorly executed post acquisition integration are the most common sources of value erosion in accounting firm transactions. What the Regulator is saying and How JGA sees it At the AICPA December 2025 conference on Current SEC and PCAOB Developments, common topics were the presence of private equity in the accounting firm space and the opportunities and challenges that come with this investment. As it relates to private equity, then-acting PCAOB Chair George Botic noted that while these investments have the potential to enhance audit quality by increasing firm capacity and modernizing audit tools with advanced technologies, the presence of private equity presents a risk that firms shift incentives to prioritize profitability over audit quality. Mr. Botic stated, “Both AI and private equity investments in accounting firms carry the potential to truly reshape the profession. Yet these opportunities come with clear challenges to ensure that overreliance on AI and the pressures of private equity do not jeopardize audit quality.” At JGA, we expect the PCAOB to increase its inspection focus on a firm’s system of quality management. To the extent that acquisitions present quality risks to a firm, we expect increased attention from the PCAOB in terms of how firms are managing these risks. Due Diligence: Looking Beyond the Numbers Financial performance, partner buy ins, and deal structure naturally receive significant attention during an acquisition. However, professional services firms—particularly those providing audit and assurance services—certain of the greatest risks often reside outside the financial statements. Effective accounting firm due diligence must assess not only what the target firm has earned, but how it has earned it—and whether that performance is sustainable. This includes gaining a deep understanding of: Audit quality history, including inspection and peer review results, Independence, ethics, and regulatory compliance practices, Industries served, industry concentration and related expertise, Client concentration, retention trends, and engagement risk profiles, Partner governance, compensation alignment, and succession readiness, Technology platforms, data security, and scalability, and Firm culture, leadership dynamics, and decision making processes. When these areas are not rigorously evaluated, issues frequently surface after the transaction closing—when remediation is more disruptive, more expensive, and far more visible to regulators, clients, and staff. The Risks of Inadequate Due Diligence Inadequate diligence often leads to unanticipated post transaction challenges, including: Regulatory findings related to legacy engagements, Independence violations requiring retroactive remediation, Client attrition driven by service disruption or cultural misalignment, Talent loss stemming from unclear expectations or compensation inequities, and Technology incompatibilities that impair efficiency and data integrity. Deficiencies inherited through acquisition can affect inspection outcomes, firm reputation, and overall audit quality long after the transaction closes. Integration: Where Value Is Created—or Lost Even when due diligence is performed thoughtfully, post acquisition integration remains the most common point of failure. Integration is often underestimated, treated as an operational exercise rather than a strategic initiative requiring sustained leadership attention. Successful integration goes far beyond combining systems or standardizing branding. It requires deliberate alignment across how the firm operates, governs itself, and delivers quality—particularly in areas such as: Audit methodology and documentation standards Quality management systems and monitoring processes Partner roles, authority, and accountability Talent development, evaluation, and retention Communication with clients, regulators, and staff Absent a structured integration plan, firms risk operating as a collection of semi independent practices rather than a cohesive organization. This fragmentation can undermine consistency, weaken accountability, and complicate regulatory compliance. A Strategic Imperative in a Changing Profession As consolidation continues and regulatory scrutiny intensifies, rigorous due diligence and disciplined integration are no longer optional. They are essential to managing risk, sustaining quality, and realizing the full value of a transaction. For accounting firm leaders, the message is clear: growth through acquisition can be a powerful strategy—but only when supported by a comprehensive understanding of what is being acquired and a deliberate plan for how the combined firm will operate as one. Firms that treat diligence and integration as leadership imperatives—rather than transactional steps—are better positioned to protect audit quality, retain talent, and preserve client trust while achieving growth objectives. JGA’s Role Guiding Firms through these Opportunities For firms seeking to grow through acquisition without sacrificing quality, control, or visibility, JGA is a solution. JGA is uniquely qualified with deep experience working with accounting firms on quality management, governance, and operational transformation. We have proven due-diligence tools built that are designed to be practical, adaptable, and immediately usable—while also supporting long term consistency as firms pursue multiple acquisitions over time. Ready to get started or need help refining your acquisition activities? Contact your JGA audit quality expert today to schedule a consultation and ensure acquisition activities are tailored to your firm’s needs.

JGA to Sponsor ALI's Accountants' Liability 2026 Conference

By Jackson Johnson • February 24, 2026

WASHINGTON, D.C.: — Johnson Global Advisory (JGA) is proud to sponsor the ALI’s Accountants’ Liability 2026 conference hosted by the American Law Institute (ALI). The two‑day program will take place May 14–15, 2026, in Washington, D.C., with a live webcast option available for remote attendees. This annual conference is a premier forum for accounting firm leaders, in‑house counsel, litigators, and regulators to examine the evolving landscape of accountants’ liability, enforcement priorities, and risk management. The 2026 program will explore how recent regulatory, litigation, and technological developments are reshaping the profession and what firms can do to proactively respond. “We are pleased to once again sponsor the ALI Accountants’ Liability Conference,” said Jackson Johnson, President of Johnson Global Advisory. “This event consistently brings together leading regulators, practitioners, and risk professionals to discuss the most pressing liability and oversight issues facing accounting firms today. We value the opportunity to engage with participants and contribute to these important conversations.” The program will feature nationally recognized panels of practitioners, general counsel, industry professionals, and government officials. Planned discussions will address current and emerging challenges facing accounting firms, including: Regulatory and enforcement priorities impacting the accounting profession Recent trends in accounting‑related litigation PCAOB and SEC perspectives on audits, inspections, and gatekeeper liability The impact of AI, cryptocurrency, and emerging technologies on audit quality and firm risk Best practices for navigating an evolving and uncertain regulatory environment Register by April 13, 2026, to attend in-person and use the code “ JGA2026 ” to save $250 off . OR, for webcast attendance, use the code " JOHNSON " to save $125 off the tuition. Click here to register. To learn more about how Johnson Global partners with in-house and outside counsel to support public accounting firms, we invite you to explore our latest brochure. This resource outlines our approach to independent monitoring and consulting, including how we assist firms in navigating PCAOB and SEC investigations, implementing quality control improvements, and responding to regulatory findings. Download the brochure below to see how our experienced team can help your firm meet today’s compliance challenges and build a stronger foundation for the future. Get a copy of our brochure here . About Johnson Global Advisory Johnson Global partners with leadership of public accounting firms, driving change to achieve the highest level of audit quality. Led by former PCAOB and SEC staff, JGA professionals are passionate and practical in their support to firms in their audit quality journey. We accelerate the opportunities to improve quality through policies, practices, and controls throughout the firm. This innovative approach harnesses technology to transform audit quality. Our team is designed to maintain a close pulse on regulatory environments around the world and incorporates solutions which navigates those standards. JGA is committed to helping the profession in amplifying quality worldwide. Visit www.johnson-global.com to learn more about Johnson Global.

Joe Lynch, JGA Shareholder, to Present in AICPA & CIMA Quality Management Webcast Series

By Jackson Johnson • February 24, 2026

We’re pleased to share that Joe Lynch , JGA Shareholder, will be presenting in a series of AICPA & CIMA webcasts focused on practical considerations for Quality Management. These sessions are designed to provide guidance in your QM journey. They support key elements such as engagement quality reviews, root cause analysis, and ongoing monitoring and remediation. Register for Upcoming Sessions Session 1 — Quality Management: Engagement Quality Reviews What you’ll learn: Practical considerations for your firm's responsibilities for engagement quality reviews and the reviewers requirements when executing engagement quality reviews under the updated quality management standards, including how to make EQRs scalable and effective. Register for this session here . Session 2 — Quality Management: Performing a Root Cause Analysis What you’ll learn: How root cause analysis supports remediation by identifying underlying drivers of the findings and deficiencies; supporting the design of corrective actions that prevent recurrence. Register for this session here . Session 3 — Quality Management: My System is Set Up — Now What? What you’ll learn: Post-implementation requirements of SQMS No. 1, which include monitoring activities, evaluating findings and deficiencies, remediation, and the annual evaluation process—so your system stays responsive and effective. Register for this session here . These sessions are included with a current Webcast Pass. At Johnson Global Advisory , we support firms in selecting, implementing, and optimizing these tools to meet their unique needs. For more insights, visit our blog or contact us to learn how we can help your firm AmplifyQuality®.