Pilot Program Created for Audit Quality Indicators
After publishing a set of possible Audit Quality Indicators (AQIs) in its paper, CAQ Approach to Audit Quality Indicators, the Center for Audit Quality (“CAQ”) has announced a pilot program for testing the new indicators. Through its paper, the CAQ details the proper approach how to communicate the prospective AQIs, which will be tested by CAQ member firms that have select audit committees.
The set of AQIs are viewed as guidance for audit committees in overseeing audit processes. In putting together the AQIs, the CAQ collected feedback from key stakeholders and the audit profession. Member firms also determined which audit indicators are most important, as well as how and to whom they should be shared with.
The potential AQIs feature four main elements of audit quality:
- Firm leadership at the top;
- Engagement team knowledge, experience and workload;
- Monitoring internal quality review and Public Company Accounting Oversight Board inspection results; and
- Auditor reporting, such as reissuance restatements and withdrawn auditor’s reports.
The CAQ will work with its member firms to carry out pilot testing with engagement teams and their associated audit committees. Pilot testing will run through the end of the 2014 audit cycle. For more information, the press release regarding the pilot program and the CAQ Approach to Audit Quality Indicators are available on the CAQ’s website.