Skip to main content
Our approach to audit contract monitoring
- Our approach is grounded in the International Auditing and Assurance Standards Board’s (IAASB) Framework for Audit Quality, which is widely regarded as a definitive statement on overall audit quality. We have taken the attributes the IAASB expects to be present in a good quality audit and distilled them into three tests, which form the basis of our contract monitoring approach:
- adherence to professional standards and guidance;
- compliance with contractual requirements; and
- effective relationship management.
- The main evidence sources that we use to monitor against the three tests and the relationship between the IAASB framework, and our audit contract monitoring arrangements are shown in Appendix 1.
- Responsibility for providing audits of appropriate quality and delivering their obligations under the contract rests ultimately with an appointed auditor. However, audit quality, efficiency and effectiveness are a shared responsibility across appointed auditors, PSAA as Appointing Person, s151 Officers (CFOs) and audit committees, regulatory and supervisory bodies, the Comptroller & Auditor General (C&AG) and the National Audit Office (NAO), and government, specifically MHCLG. The FRC as regulator has a role in monitoring and enforcement aligned to its purpose to serve the public interest by promoting high standards of financial reporting, governance and audit.
- The IAASB framework notes that ‘While the primary responsibility for performing quality audits rests with auditors, audit quality is best achieved in an environment where there is support from other participants in the financial reporting supply chain’.
Back to top
