Achieving High-Quality Audits
2020-03-11 - 10:00
High-quality audits of financial statements are essential to strong organizations, financial markets and economies. While audits have historically focused on enhancing the confidence of investors and other providers of capital, other stakeholders also benefit—including directors, management, employees, analysts, regulators, rating agencies, customers, suppliers, and the general public. Acknowledging this context, high-quality audits clearly serve the public interest.
Important conversations are taking place worldwide about corporate reporting, audit quality, stakeholder expectations, and corporate governance. It is critical that policy makers adopt a balanced and evidence-based perspective that recognizes the overall, and long-established success of audit, while effectively and proportionately remediating any shortcomings in a spirit of continuous improvement.
Achieving high-quality audits requires a well-functioning ecosystem built upon ethics and independence, preconditions to achieving high-quality audits. This ecosystem involves a number of factors and participants including the right people, the right governance, and the right regulation. These elements must all work together to produce the right audit that meets the expectations of stakeholders. The quality of audit must be assessed by the right measurements. In the absence of any of these components, the audit may not meet the expectations of stakeholders.
All participants in the audit and assurance ecosystem must act to improve the audit process, the skill-set and mind-set of accounting professionals, the governance activities of companies and firms, the regulations and standards that support entity reporting and auditor behavior, and how audit quality is assessed.
Article written by: International Federation of Accountants - IFAC
