IFAC highlights factors behind high-quality audits
The International Federation of Accountants has released a set of recommendations for achieving high-quality audits as regulators around the world push for more thorough audits to avoid accounting scandals.
In a POV piece released Wednesday, IFAC identified five essential factors for performing high-quality audits: the right process, the right people, the right governance, the right regulation and the right measurement.
IFAC called on auditing firms, professional accountancy organizations, regulators, audit committees, and audit and assurance professionals to:
- Approach audits as a value-added service, not as a compliance exercise;
- Evolve new assurance services to meet the needs of all stakeholders;
- Ensure diversity in hiring practices,
- Enhance transparency and communication from audit committees, firms and professional accountancy organizations; and
- Adopt a prudential and evidence-based approach to regulation.
“Audits contribute meaningfully to the functioning of organizations, financial markets, and economies,” said IFAC CEO Kevin Dancey in a statement Wednesday. “While many thousands of audits are conducted each year without any issues, improvements are needed to ensure consistent high quality. This, however, cannot be achieved in a vacuum – all participants in the audit and assurance ecosystem must work together to achieve high-quality audits 100 percent of the time. It is a vital part of our profession’s public interest mandate.”