US watchdog finds PwC and KPMG wanting

PWC AND KPMG audits both featured "deficiencies" in 2010, according to US regulator the PCAOB.

Failure to identify or address financial misstatements, comply with disclosure requirements and perform necessary audit procedures to a satisfactory level were found at both firms.

The two audit giants also failed to provide sufficient evidence to prove they had followed correct procedures, leading the PCAOB to conclude they were not performed.

Much of the firms' audit reports remain private to give them time to address weaknesses. These criticisms become public after a year if the regulator concludes too little has been done to improve performance.

The PCAOB also recently announced it will begin joint audit inspections with Taiwan in both regulators' respective countries.

Chairman James Doty, said: "Although we have been doing inspections of Taiwan-based audit firms since 2007, this agreement with Taiwan's Financial Supervisory Commission is important to strengthening our ties with the FSC so that we may work more closely together. We are pleased to have reached this achievement with a partner in this important region."