5 posts categorized "Enhancing Audit Quality" Feed

Will a New EBP Audit Proposal Enhance Quality?

Shutterstock_502885915Enhancing quality in various areas of the audit and various kinds of audits is a top priority for us at the AICPA. We recently issued an exposure draft entitled Forming an Opinion and Reporting on Financial Statements of Employee Benefit Plans Subject to ERISA. Its goal is to provide a report that clarifies audit procedures and the responsibilities of auditors and management, thus improving quality and transparency. The Auditing Standards Board (ASB) is encouraging auditors and preparers who are involved in audits of the financial statements of Employee Retirement Income Security Act (ERISA) plans to familiarize themselves with this proposal, and we are very interested in receiving feedback on the proposed changes. Comments should be sent to Sherry Hazel at Sherry.Hazel@aicpa-cima.com by Aug. 21.

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Documentation: A Key Ingredient for Audit Success

Pound cakeYou’re trying out a pound cake recipe, but when you pull your pan out of the oven, you realize the cake didn’t rise. Instead of being fluffy and moist, it’s flat and dense. You double-check the recipe and stop short when you see baking powder on the ingredient list. You left that out because you didn’t have any and you figured it wouldn’t matter. You did everything else perfectly, so how could leaving out this one ingredient have such a big impact?

You may never have thought there could be a similarity between baking and auditing, but in both cases, leaving out one key ingredient can ruin the outcome. You’d be amazed how often it happens.

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Is Your Firm Seaworthy?

Shutterstock_264369773The parallels between sailing and audit quality came to mind recently when I was speaking with a practitioner who is passionate about sailing. His comments about his enthusiasm for sailing reminded me of the profession’s passion and ongoing commitment to quality.

When sailors go to sea, they depend on their ships to get them to their destinations quickly and safely, conquering instability, uncertain weather conditions and unexpected obstacles along the way. In many ways, they place the same faith in their vessels as CPAs place in their firms. CPAs rely on the firms they’ve built to achieve their goals – to help them serve their clients and business communities, uphold the public interest and create thriving workplaces – as they navigate the many challenges of a fast-changing and increasingly complex environment. In both cases, a strong discipline and commitment to quality is critical to success.

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The Secret to Quality Audits and Fine Wines? Quality Control

Vineyard“Quality means doing it right when no one is looking.”
Henry Ford

Browsing the internet and looking at websites of CPA firms I notice they pretty much all talk about being quality firms. We all believe we have quality, but just what is quality?

As I sit with my evening glass, I realize what draws us to a fine wine is the diligent process to produce the beverage we enjoy. The process for producing a fine wine is not unlike the accounting and auditing world. Indulge me as I demonstrate the similarities.

Winemakers must identify critical points in the process where problems can arise in order to  eliminate or minimize precursors for taints and faults, and then rectify any problems that still do occur. 

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Making a Bold Move to Improve Audit Quality

Like many of you, my background is in auditing. We launched our careers playing a vital role on an audit team. From those early days, with every engagement, we gained increased confidence in this complex discipline. We developed the understanding that our exemplary abilities to perform the audit are fundamental to the public’s trust in our profession.

In recent years, audit quality and audit relevance have become focal points for both public and private companies. It’s more important than ever for the profession to remain vigilant and uphold excellence. That’s why I’m proud that the AICPA has developed another plan, a bigger and bolder one than ever before to make this happen.

About a year ago the AICPA announced its Enhancing Audit Quality (EAQ) initiative, publishing a discussion paper, Enhancing Audit Quality: Plans and Perspectives for the U.S. CPA Profession, for member and stakeholder feedback. The paper, released last summer, spelled out our strategic thinking on how to improve audit quality. We received more than 860 comments from various constituents, and with that feedback we developed our 6-Point Plan to Improve Audits. I summarize the highlights of the plan in this short video.

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