Audit service quality monitoring arrangements

Introduction

PSAA is committed to ensuring good quality audit services for opted-in bodies. PSAA has adopted the International Auditing and Assurance Standards Board’s Framework for Audit Quality (IAASB framework) as the model for its appointing person audit quality arrangements. This is widely regarded as a definitive statement on overall audit quality.

The framework makes clear that a quality audit is likely to be achieved by an engagement team that:

  • exhibits appropriate values, ethics and attitudes;
  • is sufficiently knowledgeable, skilled and experienced and has sufficient time allocated to perform the audit work;
  • applies a rigorous audit process and quality control procedures that comply with law, regulation and applicable standards;
  • provided useful and timely reports; and
  • interacts appropriately with relevant stakeholders.

Audit quality formed a core part of the evaluation of tenderers in the audit procurement, with tenderers encouraged to have regard to the IAASB Framework in their responses to show how they would meet our rigorous quality requirements. Ongoing contract management arrangements have the dual purpose of reporting for opted-in bodies and ensuring that PSAA meets is obligations under the Local Audit (Appointing Person) Regulations 2015, to monitor compliance of auditors against the obligations in the audit contracts.

While responsibility for providing a quality audit rests ultimately with an auditor, audit quality, efficiency and effectiveness are shared responsibilities. They are key concerns for appointed auditors and audit firms; for chief finance officers (CFOs) and audit committees; for regulatory and supervisory bodies; for the Comptroller & Auditor General (C&AG) and the National Audit Office (NAO); and for Government. The IAASB Framework notes that all parts of the financial reporting supply chain have a role in contributing to and encouraging a local audit environment that supports high quality audits for opted-in bodies. PSAA’s sponsorship of the Local Audit Quality Forum is intended to support opted-in bodies’ role in audit quality and is in direct response to feedback from audited bodies. The forum will allow scope for discussion of common concerns by all stakeholders.

 

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