Open the door to a successful QAD visit with these key insights.
In 2017, ICAEW completed over 600 audit monitoring reviews, with around one in 10 of these firms being reported to the Audit Registration Committee (ARC) – a slight increase from the previous year.
To explain, we need to make a report to the ARC if there are significant concerns about a firm’s compliance with the audit regulations. We close most visits based on firms’ responses to our visit findings, and with no further follow-up action, but some issues do lead to reports to the ARC and they tend to fall into five main areas.
Poor quality audit work, including doubts over an audit opinion, is the most common reason for a report to the ARC – especially when there are significant gaps in audit evidence in key areas or concerns about important judgements in higher risk areas. Sometimes, these concerns will lead us to conclude that the financial statements may not be true and fair. Unless we can see that these points are isolated and that the firm has things under control, we are likely to report these issues to the ARC.
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