Want a glimpse of the future in UK audit? The records of the US PCAOB are one place to start.

The body has for several years been running the rule over US audit firms, a practice that the UK will adopt under the auspices of the Professional Oversight Board. The reports in the US have not been especially flattering.

In fact, the body routinely questions how the firms could have signed off the audits that they did.

The good news, though, is that things are getting better. Fulcrum, a US forensic accounting practice, has analysed the reports, and found that the watchdog is drawing attention to fewer audits that they cannot support than in the past.

For 2004 audits, 65 of those inspected were unsupported. That fell to 47 for 2005 audits, and was at 29 this year. Even so, it might be taken as cause for concern that so many still raise issues.

The PCAOB in its reports always claims that people should not draw trends from the numbers, however.

‘The total number of audits reviewed is a small portion of the total audits performed by these firms, and the frequency of deficiencies identified does not necessarily represent the frequency of deficiencies throughout the firm’s practice,’ the Board said in a recent report. Even so, a trend does seem clear across the four firms.

The seriousness of the deficiencies is another matter entirely. Deficiencies include a failure to document procedures that may well have been carried out but not written down, for instance.

The system in the US appears to be hugely disliked by the US firms. The most recent report by the PCAOB on Pricewaterhouse-Coopers drew stinging criticism from the world’s largest audit firm. It said that one of the board’s findings was ‘factually incorrect’.

‘We have concluded that, in each instance, our original procedures were sufficient to support our audit conclusions and the opinion rendered at the time,’ PwC said in a letter to the board.

Will this combative relationship be exported to the UK when the POB starts reporting on individual firms? That depends. The POB has already criticised a perceived lack of documentation for audit judgments in the UK, so it would be surprising if they were not to make similar remarks on those lines.

UK auditors like to argue that the UK’s system is far better than that in the US, and if that is true, we might expect to see cleaner reviews of auditors. Only time will tell.