The clients we aim for and the services we offer are focused on businesses we can partner with and services we can be passionate about.
This was a major item a few years ago but it has come back in the spotlight
Making sure that quality is a major factor for partner admission and remuneration, monitoring of findings especially root cause analysis and steps taken to prevent a repeat of failures. There is a major focus on the firms’ own internal review processThe objective of the engagement quality reviews are to ensure that the audits performed meet the requirements of the International Standards of Auditing and that work done is adequate and has been properly documented. The reviews can be performed as part of the firms’ own quality review process or on an ad hoc basis, to deal with for instance a very high risk client or to obtain a second opinion on a matter.
We will not accept an appointment for an engagement quality review where we do not have adequate relevant experience or expertise of the industry.
We will do the necessary background checks and confirm and communicate our independence where we perform reviews.
The format of our reporting will be tailored to your needs and the nature of the reviews performed.
Our fees are based on the time spent on the assignment as well as the risk associated with the engagement. These will be communicated and negotiated upfront.
A major focus of regulators, both the JSE and IRBA, has become the application of the residual value and expected useful live assessments of PPE in terms of IAS16. In a large number of instances clients are not doing annual assessments of these and auditors are either doing nothing or just noting that the impact of this is not material without doing a proper assessment. As a result financial statements do not make sense, for instance, the accumulated depreciation balance has grown to double the carrying value of PPE. This would imply to the user that the entity is not renewing its assets or that a major capex expense is forthcoming whilst in reality a large number of fully depreciated assets remain in operation and will still be used for years. In some cases it may be necessary to treat the correction of this as a prior period error especially if the assessment of residual values or useful lives was not done annually, merely adjusting prospectively may not result in fair presentation.
Discounting of debtors and creditors are back in focus – This was a major item a few years ago but it has come back in the spotlight.
Tone at the top has become a major issue for regulators – Making sure that quality is a major factor for partner admission and remuneration, monitoring of findings especially root cause analysis and steps taken to prevent a repeat of failures. There is a major focus on the firms’ own internal review process and the quality and robustness of this process.
Review findings were highest for accounting estimates and internal control testing. Assessing the reasonableness of managements judgement calls and insufficient work done to justify reliance on manual management controls were major findings, highlighting the continued need for emphasis on professional skepticism.
The IFIAR has recently released its latest review findings report which can be viewed at this link: https://www.ifiar.org/IFIAR-Global-Survey-of-Inspection-Findings.aspx