Appendix 1
Evidence sources used to monitor audit quality
Table 1 shows the main evidence sources that PSAA uses to monitor audit quality for the three tests to provide a rounded view of audit quality.
Table 1: Our audit contract monitoring
PSAA test | Sources of evidence |
Complies with professional standards and guidance | 1. Professional regulatory reports 2. Firms’ transparency reports 3. Contract monitoring data 4. Client feedback 5. Formal and informal interactions with firms |
Complies with contractual requirements | |
Has excellent relationship management |
Table 2 shows the relationship between the IAASB framework and our audit contract monitoring arrangements.
Table 2: IAASB framework elements
IAASB framework elements | Key elements of PSAA test | ||
Complies with professional standards and guidance | Complies with contractual requirements | Has excellent relationship management | |
Inputs: | |||
Values, ethics and attitude | ✔ | ✔ | ✔ |
Knowledge, skills, experience and time | ✔ | ✔ | ✔ |
Process: | |||
Audit process and quality control procedures | ✔ | ✔ | |
Delivery aligned to Method Statements | ✔ | ||
Outputs: | |||
Auditors’ reports (opinions and AARs) | ✔ | ✔ | ✔ |
Transparency reports | ✔ | ||
Professional regulators’ reports | ✔ | ||
Key interactions: | |||
Client survey feedback | ✔ | ||
Client communications | ✔ | ✔ |