April 29, 2019
By: CPA Australia, Chartered Accountants ANZ
About this guide
This guide has been developed by CPA Australia on behalf of the Australian Auditing and Accounting Public Policy Committee (APPC), which comprises representatives of BDO, Deloitte, EY, Grant Thornton, KPMG, PwC, Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia and the Institute of Public Accountants (IPA). The APPC is committed to playing a part in improving the quality of audits across the profession and hopes this guide will be a useful tool for firms of any size.
In determining effective mechanisms to improve audit quality, the APPC network firms considered what, in their experience, has had the biggest impact on audit quality. They agreed that one of the key drivers of improvement in audit quality was the use of recognition and accountability mechanisms that focus on individuals with audit-related leadership positions. Both mechanisms contribute to audit quality: recognition emphasises incentives or rewards for good audit quality, while accountability focuses on the consequences of poor audit quality. This project sought to understand current recognition and accountability frameworks and develop a guide that could be shared across the profession.
This guide is not designed to create new ‘rules’ or a one-size-fits-all framework for firms to follow. Instead, it aims to cross-pollinate ideas and learning by outlining the ways firms can approach recognition and accountability frameworks. To inform the guide, interviews were conducted and many different key performance indicators (KPIs) and firms’ cultures were observed. The material gathered has been distilled into this guide, which will:
– Facilitate and initiate innovation and growth across the profession by sharing the best elements of current practice.
– Provide a resource that is scalable for small and mid-tier firms.
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