Home Accounting and Auditing Auditors to share their business secrets

Auditors to share their business secrets

253
0

Following international trends, the IRBA is paving the way for mandatory Transparency Reports to be issued by auditing firms.

Such reports will require auditors to issue annual reports for public consumption detailing information about their business models, the way they appoint and train staff, and how they vet clients. Transparency Reports will have to share information related to:

  • Structure:
    • Legal arrangements
    • Governance structures and their authorities and relationships
    • Firm shareholders
    • Network and associations and similar structures, and how the firm ensures a consistent approach to audit quality from all members of the structure
    • Process to appoint the firm’s leadership.
  • Human Capital:
    • Selection, recruitment and retention
    • The approach and goals of continuing professional education
    • Policy concerning the rotation of key audit partners and where relevant staff
    • Independence practices
    • Basis for remuneration of partners or directors
    • Basis of incentives and remuneration in relation to KPIs
    • Transformation policies and statistics
  • Engagement related information:
    • The firms approach to client acceptance and retention and how related risks are addressed
    • Identification of PIEs for which the firm has carried out statutory audits
    • Fees earned from PIE engagements versus non-PIE engagements and their relationship to fees earned from non-assurance services
    • Information about the non-audit services provided as well as the controls in place to ensure the independence of the assurance functions
    • Technology and its impact on audit
  • Quality management:
    • Measures to foster audit quality, and quality monitoring and remediation systems
    • External inspection and monitoring results
    • Internal monitoring results
    • Information about the risk environment and the measures implemented to address these
    • Results of root cause analysis on internal and external review findings
    • Reporting on performance against key performance indicators for assessing the effectiveness of quality control processes
    • The firm’s audit quality indicators (AQIs)

Click here to read more.