Financial report audit

Auditor rotation

From 1 January 2019 audit engagement partners and engagement quality control reviewers rotation requirements are changing.

• Amendments to the Code of Ethics sections 290 and 291
• APESB: Audit partner rotation requirements in Australia – technical staff questions and answers (PDF)
• NZAuASB: Auditor rotation FAQs

Research

Auditor’s reports in Australia 2005-2015: An updated analysis (PDF)
CPA Australia, June 2017

Examines the frequency of the various types of auditor’s reports for publicly listed companies in Australia during 2014-2015, with a focus on reports with emphasis of matter paragraphs on material uncertainty in regard to the going concern assumption. The research findings highlight high levels going concern emphasis of matter paragraphs which have increased progressively since the global financial crisis, reaching 34 per cent in 2015.

See also

• Audit trends: When are auditors raising concerns?
• Trends in auditor reporting in Australia: A synthesis and opportunities for research

Regulator audit inspection findings

Australia: Australian Securities and Investments Commission (ASIC)

• ASIC speaks on improving and maintaining audit quality and the role of others
• Audit inspection program report 2015-2016
• ASIC 2015-16 audit inspections
• Audit inspection program report for 2014-15 (PDF)
• ASIC 2014-15 audit inspections

New Zealand: Financial Markets Authority (FMA)

• Podcast: FMA NZ’s key audit quality findings 
• FMA 2018 audit quality monitoring report (PDF)
• Audit quality – a director's guide 2018 (PDF)
• 2018 annual report
• FMA auditor regulation and oversight plan 2018-2021 (PDF)
• FMA discuss their audit quality monitoring key findings for 2017
• Key audit matters – a stock take of the first year in New Zealand 
• FMA 2017 audit quality monitoring report (PDF)
• Audit quality – a director's guide 2017 (PDF)

International: International Forum of Independent Audit Regulators (IFIAR)

• Why is it proving so hard to lift audit quality?

Audit quality indicators

Australia 

s.322 of the Corporations Act requires auditors of listed entities, ADIs and certain other entities to publish a transparency report on their website, which is required to include a description of the auditor’s internal quality control system, but does not mandate reporting against AQIs.

• ASIC Information sheet 184 Audit transparency reports
• ASIC Information sheet 196 Audit quality – the role of directors and audit committees

International

• Overview of Audit Quality Indicators Initiatives (PDF) –  Federation of European Accountants 
• A Framework for Audit Quality – International Auditing and Assurance Standards Board

Singapore

ACRA Audit Quality Indicators Disclosure Framework (identifying 8 AQIs) was available for voluntary adoption by audit committees of all listed entities in Singapore from 1 January 2016.

• Deepening the Audit Quality Conversation (PDF) – ACRA and CPA Australia

United States of America

• Audit Quality Indicators: Journey and Path Ahead – Center for Audit Quality
• Audit Quality Indicators – Public Accounting Oversight Board

Data analytics

• Is data analytics fundamentally transforming the audit?
• Data analytics set to reinvigorate the audit
• Using audit data analytics to gain greater insights

Professional scepticism

• Unconscious bias and professional scepticism – IAESB
• How can we become better sceptics? – IAESB
• Toward enhanced professional scepticism – IAASB, IESBA and IAESB
• How sceptical is sceptical enough for a quality audit?
• Are you distrusting enough to be a great auditor?
• State of the art research related to auditor professional scepticism (2013 – 2015) – IAASB
• Professional scepticism lies at the heart of a quality audit – IAASB

Auditor professional scepticism: Impact of trust and distrust 

• Academic report
• Academic article

Library resources

The following titles are available for members:

• The impact of rotation on accounting and audit quality
• Internal audit quality
• Investigating audit quality among Big 4 Malaysian firms
• Internal audit function, board quality and financial reporting quality: Evidence from Malaysia