Common audit deficiencies under the audit quality microscope

Abstract

The quality of an audit arises from the nature of an audit as the auditor inspects the correspondence level between the established criteria and the presented information by using the International Standards on Auditing (ISA). The way of applying ISA’s according to the auditor’s professional judgement may differ in variety of situations. In this manner, trying to evaluate the quality of audits and how high quality audits can be achieved needs to be set by several indicators according to International Standard on Quality Control 1 (ISQC 1). Audit quality indicators are a combination of qualitative and quantitative measures. Different structural, historical and economic factors may affect the application of ISA’s and so the results of the quality of an audit work. The use of information technologies (IT) through business methods and internal controls has preferably increased its importance for those same information technologies to be used in auditing and assurance services. New areas of auditing and assurance services have opened up with the digitalization process of the world. There has been speculation about whether the accounting information system (AIS) will replace what accountants do, that is, whether IT systems will replace auditors. It is undeniable that when used in the audit process, IT systems increase the quality of the audit without increasing the time spent on the audited data. However, this introduces new technological and business risks that the auditor will need to assess. Accordingly, the expectation from the quality of auditing has increased, but what about the results of the regulatory bodies? Enhanced discussions, in turn, may strengthen audit quality. This chapter will explain the key elements that create an environment for audit quality focusing on the audit deficiencies related to the reports from the world’s audit regulators. Building/enhancing trust via audit quality cannot be formulised by algorithms or particular standards or obligations. The meaning of evaluation of audit quality depends on the conditions in which the auditor faces. Measuring professional skepticism, due care or professional judgement are critical factors affecting audit quality.