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IAASA publishes reports on the quality assurance review of public-interest entity audit firms

30/03/2020

IAASA has published the 2019 quality assurance review reports in respect of eight audit firms that perform statutory audits of public-interest entities (‘PIEs’), such as listed companies, and companies that operate in the banking and insurance sectors. Commenting on the publication,

Chief Executive Kevin Prendergast said “These reports set out the results of our inspections of the firms’ overall audit systems of quality control, and of a sample of each firm’s audits of PIEs to establish how those systems are operating. The reports show that while in general the quality of auditing in Ireland is good, there is room for improvement, and in some areas that room is significant. All firms have engaged with the process and are implementing all recommendations. The Authority hopes that this information will contribute to a better understanding of the level of quality in the Irish audit market, assure the general public that quality is being assessed and addressed, and will assist those who make decisions about appointing or retaining audit firms.”

All firms were subject to a whole firm review, which included an assessment of tone at the top, quality of partner and staff evaluation including compensation and promotion, audit quality reviews and audit off-shoring practices. IAASA also reviewed 24 individual audits across six audit firms.

The reports disclose key recommendations in respect of audits inspected along with the assigned grade. 71% of audits of PIEs inspected were assigned a grade of 2 or higher, indicating that audit quality is of a good standard. For the 17% of audits inspected that were assigned a grade of 3, there are more substantial issues. The remaining 13% of audits that were assigned a grade of 4 require significant improvement. All of the audits graded 4 were within one audit firm.

The individual reports are available here.

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