Learning from Goliath
Smaller firms can learn from the challenges faced by the world’s largest networks.
All countries have felt the impact of the financial crisis, even if some have not experienced the economic downturn. Politicians have strengthened regulation. Those who set the standards have responded with new and revised frameworks. Even the expectations of auditors have changed, particularly across Europe and the US, as auditors in all countries are being judged against emerging best practices.
Identifying these best practices can be as tricky as deciding what is in the public interest, since both are constantly changing. However, they are reflected in the annual inspection findings of the International Forum of Independent Audit Regulators (IFIAR). With members from 50 countries that have adopted International Standards on Auditing (ISAs), the IFIAR findings highlight some of the commonest challenges and criticisms that auditors and the profession face.
"Although IFIAR reports relate to inspections involving the six largest audit firms, the relevance of the issues feeds through to smaller firms," says Chris Cantwell, technical manager for practice regulation. He’s not just referring to firms engaged to audit public interest entities, public companies or systemically important financial institutions. "What we find, from audit inspectors, is the same deficiencies tend to arise elsewhere," adds Cantwell.
This is an extract from an article in the Septemer 2015 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.
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