In accordance with Regulation 537/2014 (‘the Regulation’), effective from 17 June 2016, IAASA is responsible for inspecting the quality of audit work performed by the auditors of Public Interest Entities (‘PIEs’). IAASA’s Audit Quality Unit (AQU) performs these inspections by means of an annual quality assurance review of the relevant PIE audit firm.
A quality assurance review involves:
- assessing the design of the firm’s system of quality control
- performing compliance testing around the implementation of the firm’s procedures
- evaluating the quality of a sample of audits of PIEs
The results of these reviews are published annually, in a separate report for each PIE audit firm, and are available on the IAASA website. Where relevant, the quality assurance review reports contain recommendations that the PIE audit firm is required to implement within 12 months from the date of the report.
In addition to the quality assurance reviews, AQU also performs the following:
- Joint inspections with overseas regulators
- Thematic reviews on topical audit matters
- Training and other reporting & consulting with other audit regulators