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Achieving high quality audit

Étude de cas : Achieving high quality audit. Recherche parmi 236 000+ dissertations

Par   •  16 Septembre 2018  •  Étude de cas  •  886 Mots (4 Pages)  •  136 Vues

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The PCAOB’s role is so important to achieve a high quality audit. The board’s 2012-2016 strategy was to focus on the outreach and interaction with the audit committees to enhance auditor independence and audit quality.

So with that backdrop, we will list the several efforts and initiatives provided by the PCAOB to execute their strategy, including the goal of achieving high quality and reliable audit. (These initiatives will be considered as the result of the article).

Improving the standard auditor’s report:

The auditor’s report has remained unchanged since the 1940s, with the same form, content and overall information value, in this study, the board suggested to improve the standard auditor’s reporting model.

The PCAOB presented a proposed standards related to the auditor’s report and the auditor’s responsibilities regarding other information in an annual report , the proposed standard would retain the pass/fail model in the report, and would provide additional information to investor and others financial statement users about the audit and the auditors.

The auditor have to report on a critical audit matters about the most difficult judgments he made in his audit, the difficulty in obtaining sufficient appropriate evidence and the difficulty in forming the opinion in the financial statements.

Auditor independence, objectivity and professional skepticism:

At 2012, the board has suggested a project about studying and managing the various factors that influence auditor independence and professional skepticism. The studies resulted the idea of “audit firm rotation” to reassure the auditor independence.

After a year of analysis, the board has not found evidences about the impact of auditor tenure on audit quality, so they rejected the idea of limiting the auditor’s mandatory. But, due to the potential risks of long auditor tenure that could manifest in individual situations, the board asked audit committees to be vigilant in overseeing auditor independence and objectivity.

On June 30, 2013, the project was renamed “auditor independence, Objectivity and professional skepticism”, the board focused on promoting auditor’s independence and professional skepticism.

The PCAOB issued a practice alert during its inspection that includes examples from inspection activities in which the board found that auditors did not apply appropriate professional skepticism throughout the audit process. To solve that issue, the board suggested that the auditors should take challenges to promote the appropriate applications of professional skepticism. The audit committees can also promote appropriate professional skepticism on the part of the audit team, through regular communications with the audit partner and asking questions about auditor’s procedures, alternatives considered and difficult judgment made. By asking these questions, the audit committees will be ensured that members of audit team have implemented a thorough and questioning approach to the work in key audit areas and throughout the audit.

The board has also published a standard giving audit committees an additional opportunity to communicate with their auditor about important areas of the audit. The standard requires the auditor to communicate key issues about the


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