How to Improve Audit Quality

Proposal 1: Audit Quality 

Research question: what are the various indicators of audit quality? 

Audit quality is one of the fundamental characteristics of auditing in any given organization. Audit quality may be defined as the maters that lead to the auditors in a particular company to detect the material deficiencies in the cash in the company and report them accurately. Audit quality also points to the fact that the financial reports that the auditors come up with are free from any misstatements and false values. In a nutshell, audit quality ensures that there is no accounting fraud at the organization. Audit quality also provides that the financial records of the organization have a consistent flow and that there are no doubts about their correctness. The audit quality also provides that a difference between the audit estimates and the actual values. The auditors of the various organizations such as the United States of America have to ensure that the financial projections are reasonable so that they can easily be related to the real values after the calculations are made (Christensen et al., 2016). 

The first indicator of audit quality is the firmness in the top management of an organization. The senior management in an organization is one of the factors that determine the financial development of the given organization. The top management has to exercise contemporary and technological leadership skills that will drive the financial part of the organization forward. The leaders in the organization have to continually adjust their management styles to ensure that the quality of the audits is guaranteed. The auditors have therefore to keep challenging the existing audit methods and come up with other ways of conducting the inspections at their organizations. The top management officials of the organizations have to also account for the various problems that are experienced in the auditing of the company's finances and come up with solutions that are likely to help them overcome the setbacks. The firmness of the top management officials is reliant on their togetherness and readiness to work as a team to solve the audit issues (Center for Audit Quality, 2014). 

The second indicator of audit quality is the reporting of the organizations' auditors. Conventionally, an auditor in an organization is responsible for dealing with the bookkeeping activities for the financial records of an organization. The auditors work independently from the influence of the other departments of the organization. An auditor in an organization is also responsible for going through the financial reports before posting them to ensure that they are free of errors. When it comes to audit quality, the auditors play an integral role in providing the records are accurate and reflect the actual financial performance of the organization. The communication to and from the auditors in their preparation of the financial documents in an organization is vital and acts as an indicator of audit quality. The development of reliable financial reports by the auditors is an indicator of audit quality. The usefulness of the financial statements that the auditors come up with is also evidence of quality auditing in an organization (Center for Audit Quality, 2016). 

Strict monitoring of the auditing processes in any given organization is another method of ensuring that the audit quality is maintained. The organizations may invest in control software for the audit quality maintenance. An organization that has the management that is actively involved in the tracking of the auditing processes indicates the quality of audits is prioritized in the company. The act of the top control of the organization in the identification of the high-risk areas in the company's review is another indicator of the monitoring processes in the auditing, and the leaderships desire to ensure that the audits are of high quality. The creation of a compliance audit plan is another monitoring function that an organization puts into consideration when they need to ensure the quality of the audits is guaranteed. An organization that ensures that the necessary program managers are involved in the assessment of the high-risk areas in auditing indicates that the management is concerned with making sure that the audits are of high quality (Tepalagul & Lin, 2015). 

Monitoring also becomes an indicator of audit quality in a case where the program managers concerned with the auditing processes in a specific organization come up with the various monitoring plans to ensure that the records are compliant to the set laws such as in the United States of America. The program managers can also indicate audit quality by calculating the risks involved in the auditing processes and their financial implications, both direct and indirect. The program managers can also indicate audit quality by ensuring that the audit records being sent out of their companies are an actual report of their internal controls (DeZoort & Taylor, 2015). 

The engagement, experience and the workload of the staff in a given organization are an indicator of the desire to ensure that the audit records are of a desirable quality in the company. The experience of the staff in handling the audits in the organization is an indicator of their acquired knowledge in the field and has a likely effect on the records being of high quality. The engagement of the staff in evaluating the requirements in the audit indicates that the team suggests their desire to come up with quality audit records to ensure that the organization has grown. The considerable workload among the staff involved in auditing such as the various program managers is also an indicator of the audit quality in an organization. This shows that they are willing to spend adequate time with the financial records of a company and therefore boost the quality of the audits (DeZoort & Taylor, 2015). 

Proposal 2: Auditing Standards 

Research question: what are the universally accepted auditing standards for organizations? 

To ensure that the auditing standards are maintained in the financial reporting of a company, an auditor must have all the technical know-how and the experience to perform the audit. Auditing is a process in an organization that requires precision since the errors involved in an audit could cost the organization a tremendous amount of money. Therefore, the company audits have to have a logical mind and have the practical ethics such as transparency and honesty. In the United States of America or for example, the financial auditors are also expected to have a piece of knowledge in coming up with and interpreting the statistical figures and calculations in the process of auditing. Additively, the auditors need excellent communication skills in the English language in the case of the United States of America, both written and verbal language. Superior mathematical abilities are inherent to the auditing profession in and out of the United States of America (AICPA, 2018). 

Standards of the auditing work also hold as the requirements of the financial auditors. The auditors have to comprehend the steps and the approaches of their audit work and know how to handle it. They are expected to come up with plans for their audit work and the duties of heir assistants if any. The idea of auditing processes may begin with the evaluation of the financial performance of a given organization. The financial auditors are then supposed to be involved in the compilation of their auditing work. The auditors will then end with a review of the same to ensure that there are no errors in the financial audit of their target companies. Therefore, the auditors, In this case, have to demonstrate their leadership skills and most precisely those that have to do with supervision of their work and their juniors as well. That is a generally accepted principle of the auditing across the world (PCAOB, 2018). 

The auditors within and without the United States of America are expected to learn and follow their professional code of conduct to the letter. This improves the standards of the audit work. Their code of conduct targets to come up with an ethical environment to ensure that the rules of the auditing are maintained. Confidentiality is one of the moral principles that the auditors have to keep in check. The auditors have to ensure that their work is treated as a secret and only let the values of the financial reports of the company be known to the right parties. The auditors of an organization have to own the information that they receive from the organizations to ensure their auditing work is a success. The laws in the United States of America and the other countries across the globe prohibit the auditors from using the financial and auditing information for their personal use (PCAOB, 2018). 

The evidence is another generally accepted auditing principle that cuts across the globe. In as much as the professional code of conduct for the authors ensures that they keep their work private and avoid sharing the information with the additional parties, the auditors' have top communicate their work to the parties after their work is done. The procedures that the auditors use to deal with the auditing processes in an organization have to be communicated to the organization and the financial monition companies in the various countries in the world. Therefore, the work of the auditors has to indicate the systematic procedure that they used to come up with their final judgment of the financial position of the companies with which they are dealing. The financial statements that are under audit in the company have also to show that the auditors had the required evidence as they dealt with them and came up with opinions afterward (Alzeban & Sawan, 2016). 

To ensure that the standards of the auditing are upheld, the auditors also have to indicate their proper knowledge of the entity and its operations. The first area that the auditors need to understand in a given organization is the environment of the entity. The auditors have to learn and understand both the internal and the external environment of the organizations of choice to see how the environments affect their financial performance. The auditors have to observe the management at the organization and ensure that they have understood the likely impact that the management of the organization has on the values in the financial statements and the audit. The auditors have to identify the possible risks that the financial misstatements in the organization may have on the different sectors of the company. The misstatements could be due to financial accounting fraud. All the observations above will lead to the ensuring of the standards enhancement in the audit of an organization (Alzeban, 2015). 

To ensure that the standards of auditing are further upheld, the auditor needs to ensure that they state what principles were used in their auditing processes. Most of the auditors apply the generally accepted accounting principles in their auditing. In such a case, the reasons and their benefits for use are known across the globe. The auditors may also come up with methods of auditing that are specific o the organization they are auditing. In this case, the financial audits have to state why they used the principles for their auditing processes. The auditors are usually independent in their auditing and are free to choose from auditing methods, which suit different organizations. The auditors also have to explain the circumstances that may have led to their lack of use of the generally accepted accounting principles. That ensures that the auditing principles are mentioned in an organization (Alzeban, 2015). 

References 

Proposal 1 

Center for Audit Quality. (2014). The CAQ approach to audit quality indicators . Retrieved from https://www.thecaq.org/caq-approach-audit-quality-indicators 

Center for Audit Quality. (2016). Audit quality indicators: Journey and path ahead . Retrieved from https://www.thecaq.org/audit-quality-indicators-journey-and-path-ahead 

Christensen, B. E., Glover, S. M., Omer, T. C., & Shelley, M. K. (2016). Understanding audit 

Quality: Insights from audit professionals and investors. Contemporary Accounting Research , 33 (4), 1648-1684. 

DeZoort, F. T., & Taylor, M. H. (2015). COMMENTARY––A Public Interest View of Auditor 

Independence: Moving Toward Auditor Reliability When Considering and Promoting Audit Quality. Accounting and the Public Interest , 15 (1), 53-63. 

Tepalagul, N., & Lin, L. (2015). Auditor independence and audit quality: A literature review. 

Journal of Accounting, Auditing & Finance , 30 (1), 101-121. 

Proposal 2 

AICPA. (2018). Standards and statements . Retrieved from https://www.aicpa.org/research/standards.html 

Alzeban, A. (2015). Influence of audit committees on internal audit conformance with internal 

Audit standards. Managerial Auditing Journal , 30 (6/7), 539-559. 

Alzeban, A., & Sawan, N. (2016). The relationship between adherence of internal audit with 

Standards and audit fees. Journal of Financial Reporting and Accounting , 14 (1), 72-85. 

PCAOB. (2018). AS 1001: Responsibilities and functions of the independent auditor. Retrieved from https://pcaobus.org/Standards/Auditing/Pages/AS1001.aspx 

PCAOB. (2018). Ethics & independence. Retrieved from https://pcaobus.org/Standards/EI/Pages/default.aspx