All firms can improve audit quality by focusing on some of the common shortcomings that regulators have found in their inspections.
Each year the International Forum of Independent Audit Regulators (IFIAR) conducts an annual survey of the inspection findings of its members, which span the globe from the Abu Dhabi Accountability Authority to the UK Financial Reporting Council. Although these regulators’ inspections focus on the largest global audit firm networks and audits, the relevance of the findings feeds through to even the smallest firm, as the common weaknesses are also cited by ICAEW’s Quality Assurance Department (QAD) as key areas where firms can improve audit quality.
By focusing on some of the areas where repeated audit shortcomings are highlighted by the IFIAR inspection findings, all firms may potentially improve the quality of their audit engagements. Over the five years that IFIAR has been conducting this annual survey there have consistently been high numbers of inspection findings for the themes of: internal control testing, fair value measurement and revenue recognition. Helpfully, additional detail is available about the nature of the most frequently observed deficiencies within these inspection themes.
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