ThinkTWENTY20

CPAB has issued its 2019 fall report on our audit quality assessments to date. We note there has been some improvement in overall audit quality over 2018. It is CPAB’s expectation that audit firms should achieve a performance target of at least 90 per cent of files inspected with no significant findings by 2021. CPAB will publish its final assessment of all the firms it inspects in March 2020. In response to our concerns about inconsistencies in the quality of audits performed, CPAB has evolved our audit oversight methodology to include quality management systems assessments (supplementary to our engagement file inspections) which assess the effectiveness of quality controls and processes at the four largest firms. This approach emphasizes the need for firms to systemically embed audit quality into ongoing operations across the entire assurance portfolio.  

In our report, we note the firms’ commitment to improve their quality management systems. At the same time, in certain cases, our file inspections findings indicate specific deficiencies in their quality systems. 

Along with CPAB’s inspections results, our report highlights several quality matters that impact audit committees, regulators and investors, and that we expect will impact how future audits are performed. We’ll publish more on our perspectives related to fraud, going concern, crypto-assets, Audit Quality Indicators and other regulatory matters later in 2019.