Research question: How is audit performance measured using the AQI?
In line with both international and PCAOB standards, Audit companies must set up a quality control system ( Christensen et al. 2016). The aptitude program of AQIs might present a further viewpoint on the strategic component of a company’s quality control system. As it relates to a specific audit and might be helpful for an additional understanding of an audit committee concerns that can play a role in the quality audit performance, comprising of oversights to audit quality which might make an allowance for further resolute deliberations on the plans of the audit firm to control such ventures (Dickins et al. 2014). Both the Public Company Accounting Oversight Board’s PCAOB’s and the Center for Audit Quality CAQ’s projects on Audit Quality Indicator aims at detecting possible audit quality assessment, other than the measure of outcomes, whereby the audit committee groups and audit teams might study, take into account, and employ to determine audit effectiveness.
CAQ's method supports the tasks and functions of audit teams and emphasizes the significance of the communications from the auditor within the audit group (Persellin et al. 2014). Increasing AQI performance focus on the discussion-level communication meter that might be customized to the dialogue needs as well as the of a particular audit team interests to maintain its control task. The company-based measure addresses the firm’s audit of general approaches and strategies balance these engagement-based indicators (Dickins et al. 2014). The communication focal point on the AQIs to audit teams is suitable for the reason that:
Delegate your assignment to our experts and they will do the rest.
AQIs present significant information to audit groups especially for those with immediate management in audit task (Persellin et al. 2014).
It Increases dialogue quality with audit teams as they are distinctively placed to participate in communicating with the auditors to attain the framework needed to present significance to AQIs and possibly adopt measures that may assist maintain or enhance engagement audit performance ( Christensen et al. 2016).
It aids in external auditor selection/assessment– it can act upon the information at hand to resolve auditor reappointments, new auditor appointments, and selection of lead engagement partners.
In 2015 summer series roundtable discussions with audit teams’ partnership in Chicago, New York, London, and Singapore, the CAQ set up to continue with the evaluation of the array of prospective AQIs as well as recommended communication approach (Dickins et al. 2014). At the proceedings, committee members took into account the pilot testing findings and articulated their opinions on the prospective gain and risks of identification and development of the set of AQIs. Significant findings from the discussion series consist of the following:
Participants articulated the information need that might help audit teams in their evaluation of the more qualitative feature of the audit, for instance, the engagement team using the correct approach to develop professional ambiguity and auditor verdict ( Christensen et al. 2016).
Audit teams partners acknowledged that AQIs might assist them to manage their external audit quality, despite the external audit being only an element of quality financial management.
Most members approved an adaptable course that permits audit teams, operating with the external auditors, to shape or modify the range and scale of AQIs that best fit its specialized information requirements (Persellin et al. 2014).
There was an agreement that AQIs single-handedly, with no framework, cannot adequately correspond to factors pertinent to some distinct audit review or audit company.
Another consensus was that the identification and evaluation process of AQIs requirements is audit committee-directed and renewable, subsequently necessitating constant evaluation and modification to facilitate the ever-changing information demands of auditing teams.
Audit committees conveyed robust interests that public engagement-level disclosures of AQIs might result in involuntary corollary. A uniform agreement materialized that any engagement-level disclosures of AQI information must be controlled.
References
Dickins, D., Fay, R. G., & Reisch, J. (2014). Measuring and communicating audit quality: The new AQIs. The CPA Journal, 84(9), 16.
https://search.proquest.com/openview/dcb5131ab6b1ba64e276155df0d8807b/1?pq-origsite=gscholar&cbl=41798
Persellin, J., Schmidt, J., & Wilkins, M. S. (2014). Auditor perceptions of audit workloads, audit quality, and the auditing profession.
https://digitalcommons.trinity.edu/cgi/viewcontent.cgi?referer=https://scholar.google.com/&httpsredir=1&article=1040&context=busadmin_faculty
Christensen, B. E., Glover, S. M., Omer, T. C., & Shelley, M. K. (2016). Understanding audit quality: Insights from audit partners and investors. Contemporary Accounting Research , 33 (4), 1648-1684.
http://www.audsymp.dept.ku.edu/wp-content/uploads/2014/05/Saturday-Paper-2-by-Christensen-Glover-Omer-Shelley.pdf
