AUDIT-PRESENTATION
Transcript: Expand the set of information, standardize that information and ensure its reliability through assurance process. Enable parties outside of audit committee to better judge how well each audit firm is managing its financial and human resource and addressing long-term sustainability concerns Facilitate the competitive process INPUT What is audit quality??? PROCESS THE END THANK YOU Introduction Transparency report What your audit committee needs to know in order to choose and oversee an independent auditor. Doing it right can keep you out of count. Why choose a suitable independent auditor is so important?? By Ed Smith, Jean C.Bedard and Karla M.Jonstone Prepared by: Chua Poh Yan OUTPUT FRC Audit Quality Framework key elements effect on the level of audit quality: Directorship June 26,2009 An public company ‘s Audit committee shares the responsibility for audit quality, through its responsibilities to select, compensate, oversee, and evaluate the company’s independent auditor. On October 2008 – report issued by US. Treasury Department’s Advisory Committee, co-chaired by former Securities and Exchange Commission chairman Arthur Levitt and former SEC chief accountant, Don Nicolaisen, direct the PCAOB-to examine the feasibility of requiring audit firms to periodically report on key indicators of audit quality. The characteristics of and the culture within an audit firm The skills and personal qualities of audit partners and staff The effectiveness of the audit process The reliability and usefulness of audit reports Factors outside the control of auditors that may affect audit quality Input – knowledge and independence of the audit- engagement team - provide resources in training and knowledge support - ensuring that individual engagement teams perform audits according to professional standards Process – the appropriate type and amount of audit tests - statistics on the firm’s partners, managers, and staff, and the average ratios of staff levels employed on engagements According to the Government Accountability Office- audit is conducted in accordance with GAAS to provide reasonable assurance that the audited financial statements and related disclose are: Presented in accordance with generally accepted accounting principle ( GAAP ) Are not materially misstated, whether due to errors or fraud. Output- reliable financial reports and an accurate audit opinion -proposed periodic report by auditing firm -the number of restatements or enforcement actions against the audit firm’s clients in the recent year - report on appropriateness of “ going concern” opinions Audit Quality