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First International Survey of Audit Inspection Findings Released

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Tuesday, 19 February 2013 03:55


Singapore's Accounting and Corporate Regulatory Authority (ACRA) is a member of the 44-member International Forum of Independent Audit Regulators (IFIAR), an organisation comprising audit regulators from around the world which are independent from the audit profession. As a member of IFIAR, ACRA is able compare the findings of its audit inspections with other audit regulators to help ensure that its regulation is of an international standard. The results of the survey will contribute to ACRA’s promotion of audit quality through regulation and engagement with Singapore's auditors.

IFIAR's first global survey of audit inspection findings, which was released on 19 December 2012, summarized issues identified by IFIAR Members located around the world. The survey identified common audit findings among Members in a number of areas. The survey results indicated that the largest number of inspection findings in audits of public companies occurred in the following areas: fair value measurements; internal control testing; and engagement quality control reviews.

In addition, inspections of audits of major financial institutions showed that the largest number of common inspection findings occurred in the following areas: internal control testing, valuation of investments and securities, and audit of allowance for loan losses as well as loan impairments.

The survey results also include four areas that have been discussed by IFIAR with representatives from the six largest audit firm networks since 2010: professional skepticism, group audits, revenue recognition, and the role of the engagement quality control reviewer.

IFIAR Members will continue to inspect the public company audit engagements, including major financial institutions, and work closely with the audit firms in their jurisdictions to improve audit quality. Members also will continue to follow-up with the audit firms to evaluate and monitor the audit firms’ remedial actions in response to their respective inspection findings. In addition, IFIAR will continue to work with the leadership of the six largest international audit firm networks to discuss inspection findings and the firms’ strategies and actions to improve audit quality.