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A quality discussion

Audit quality is the subject of debate around the world and among the volunteers who support the Audit & Assurance Faculty.

There is an important global debate going on about audit quality. It involves auditors, audit, firms and networks, audit committees, investors, professional bodies, regulators, standard-setters and other stakeholders in, financial reporting. However, the discussion is often hampered by competing definitions for audit quality, of which there are many.

"There is no single, widely accepted, generally acknowledged definition," says Chris Cantwell, technical manager for practice regulation in the Audit & Assurance Faculty. There are also many complex related matters to consider - which factors feed into audit quality, which indicators are representative of it, whether they should be quantitative and/or qualitative, and how they can be measured and reported on in a meaningful way, given the variety of stakeholders and there different perspectives, priorities and knowledge levels.

AQI initiatives

A number of organisations have initiatives to develop audit quality indicators (AQIs). The most recent output was a concept release from the US Public Company Accounting Oversight Board (PCAOB) suggesting potential AQIs, which aim to improve quality, stimulate competition and encourage discussion. Cantwell says: "It's not just to do with the US. It's an important consultation that will inform and impact on the global debate."

This is an extract from an article in the November 2015 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.

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