To establish in the public interest an international framework that describes audit quality holistically, including:
a) The influences of input, output and context factors;
b) Stakeholders' varying perspectives on audit quality; and
c) The importance of relationships between auditors and other key participants in the financial reporting supply chain (i.e., management, those charged with governance, investors and regulators), which influence audit quality.
Jon Grant, Chair, IAASB Member
Bernard Agulhas, Independent Regulatory Board for Auditors, South Africa
John (Arch) Archambault, IAASB Member
Phil Cowperthwaite, Former IAASB Member
Craig Crawford, former IAASB Member
Kam Grewal, Canadian Public Accountability Board
Gert Jönsson, IAASB Member
Merran Kelsall, IAASB Member
Thomas Orth, IAESB Member
Don Thomson, IESBA Member
The topic of audit quality is one of the items on the IAASB's Strategy and Work Program, 2009-2011. The IAASB first explored the topic at its December 2009 meeting (Agenda Item 12). Amongst the matters the IAASB considered were:
a) Perspectives on, or approaches to, audit quality that resonate with the mandate and work of the IAASB;
b) User perceptions of audit quality; and
c) The objectives and scope of a project on audit quality.
At its June 2010 meeting (Agenda Item 12), the IAASB considered a proposed way forward as a means for it to effectively contribute to the global debate on audit quality.
The IAASB Consultative Advisory Group (CAG) first considered the topic at its September 2010 meeting (Agenda Item P).
At its December 2010 meeting (Agenda Item 9), the IAASB deliberated the scope and objectives of a proposal to develop a consultation paper on an international audit quality framework. In addition, the IAASB agreed the issuance of a thought piece, Audit Quality: An IAASB Perspective, to stimulate further thought and discussion on the topic amongst stakeholders.
The IAASB CAG considered the topic at its March 2011 meeting (Agenda Item F).
Task Force progress / Board discussions to date
At its March 2011 meeting (Agenda Item 11), the IAASB considered and agreed:
a) The objectives and scope of a project to develop an international audit quality framework; and
b) A proposed plan and timeline for developing a consultation draft of that framework.
At its June 2011 meeting (Agenda Item 6), the IAASB considered a preliminary draft of a consultation paper on a proposed international audit quality framework. Amongst other matters, the IAASB discussed:
- The comprehensiveness of the proposed framework;
- The organization and structure of the consultation paper in setting out the various elements of the framework;
- The tone and level of detail in the description of those elements;
- Considerations relating to smaller entities and the public sector; and
The plan for consultation with stakeholders.
The IAASB CAG discussed the project at its September 2011 meeting (Agenda Item C).
At its December 2011 meeting (Agenda Item 6), the IAASB considered significant comments received from dialogue with stakeholders on the draft Audit Quality Framework paper, Audit Quality: An International Framework, and the Task Force’s proposals in response to them. Amongst other matters, the IAASB discussed: an alternative framework structure; the level of summarization of the proposed framework; a revised draft of the introduction to the framework paper; and the impact of the requirements of the applicable financial reporting framework.
The IAASB CAG discussed the project at its September 2012 meeting (Agenda Item B).
At its September 2012 meeting (Agenda Item 4), the IAASB considered a draft of its proposed consultation paper on an audit quality framework (the Framework), Audit Quality: An International Framework. Among other matters, the IAASB discussed the structure, tone and balance of the paper; areas to explore where actions could be taken by stakeholders to enhance audit quality; contextual factors that influence audit quality; and the status of the Framework as an IAASB document.
At its December 2012 meeting (Agenda Item 2), the IAASB approved for public comment the Consultation Paper, A Framework for Audit Quality. The proposed Framework describes a number of factors that contribute to increasing the likelihood of quality audits being consistently performed and encourages audit firms and other stakeholders to challenge themselves about whether there is more that they can do to increase audit quality in their particular environments.
At its September 2013 meeting (Agenda Item 3), the IAASB discussedissues arising from the comments letters received in response to the Consultation Paper, A Framework for Audit Quality (the Framework). In particular, the IAASB discussed the status of the Framework once issued, its length, whether a definition of audit quality should be developed, and the proposed wording revisions made in response to the comments received.
At its December 2013 meeting (Agenda Item 4), the IAASB approved for release the publications, A Framework for Audit Quality: Key Elements that Create an Environment for Audit Quality and 2014 Feedback Statement: Framework for Audit Quality. The publication was released on February 18, 2014 and a new webpage was launched. The objectives of the Framework for Audit Quality include raising awareness of the key elements of audit quality; encouraging key stakeholders to explore ways to improve audit quality; and facilitating greater dialogue between key stakeholders on the topic. The IAASB expects that the Framework for Audit Quality will generate discussion, and positive actions to achieve a continual improvement to audit quality.