AAA syllabus

Audit Quality Evaluation 7 / 8

</div> <div class="block" data-type="RawHtml" data-format="markup"> <!DOCTYPE html> <html> <head> </head> <body> <h1>Key Areas of Audit Quality to Evaluate</h1> <h2>1. Independence and Objectivity</h2> <ul> <li>Ensure the auditor is independent and unbiased.</li> <li>Check compliance with ethical standards and independence rules.</li> <li>Review non-audit services to avoid conflicts of interest.</li> </ul> <h2>2. Competence and Expertise</h2> <ul> <li>Assess the audit team’s qualifications and experience.</li> <li>Ensure they understand the industry and business complexities.</li> <li>Check if specialists are used for complex areas.</li> </ul> <h2>3. Audit Planning and Risk Assessment</h2> <ul> <li>Evaluate if the audit plan addresses key risks.</li> <li>Ensure it aligns with business changes or external factors.</li> <li>Verify adequate resources are allocated to high-risk areas.</li> </ul> <h2>4. Execution of Audit Work</h2> <ul> <li>Check if sufficient evidence was gathered rigorously.</li> <li>Review the use of technology like data analytics.</li> <li>Ensure work is completed on time and issues are resolved quickly.</li> </ul> <h2>5. Communication with Management and Audit Committee</h2> <ul> <li>Assess the quality of updates on findings or challenges.</li> <li>Ensure technical issues are explained clearly.</li> <li>Check responsiveness to questions or concerns.</li> </ul> <h2>6. Professional Scepticism</h2> <ul> <li>Ensure auditors challenge assumptions and investigate issues.</li> <li>Avoid reliance solely on management representations.</li> </ul> <h2>7. Quality Control Processes</h2> <ul> <li>Review the auditor’s internal quality control reports.</li> <li>Check how past issues were addressed by the audit firm.</li> <li>Understand how disputes within the team were resolved.</li> </ul> <h2>8. Value Added by Recommendations</h2> <ul> <li>Look for constructive suggestions to improve controls and governance.</li> </ul> <h2>9. Stakeholder Feedback</h2> <ul> <li>Gather input from management or board members on auditor performance.</li> </ul> <h2>10. Overall Effectiveness</h2> <ul> <li>Determine if the audit met objectives on time.</li> <li>Check if significant issues were identified and resolved effectively.</li> <li>Assess whether the audit improved financial reporting quality.</li> </ul> </body> </html> </div> ">