Annual Report 2016

20
Financial Audit | FAOA 2016
Preliminary fact-finding and
proceedings
In addition to routine inspections,
event-driven preliminary fact-finding
and proceedings are also conducted
at state-regulated audit firms. The
FAOA hereby takes particular account
of plausible information from third
parties. In the year under review the
FAOA received eight notifications
from third parties relating to the work
of state-regulated audit firms. Preliminary
fact-finding was conducted as
a result of these notifications during
the reporting year but no proceedings
were opened. Certain work that
began in the prior year could not be
finalised during the year under review
(e.g. FIFA case).
The FAOA has collected performance
indicators from the Big 5 audit firms
for eight years now. The FAOA uses
these performance indicators primarily
for the timely analysis and identification
of trends and factors that may impact
audit quality. In addition, the performance
indicators are used for risk
assessment and inspection planning.
The FAOA collects a total of 12 performance
indicators. In 2014 many
of the performance indicators were
revised and further developed to
improve their informative value and
comparability.
Audit quality indicators
The importance of audit quality indicators
(AQI) continues to increase at the
international level. This growing trend
is underlined by various projects. In
July 2016, the FEE (now: Accountancy
Europe) published an updated summary
of nine different organisations
from across the world that have developed
AQI, including the FAOA 25 . Further,
in February 2016, IFAC provided
information on a project of the Center
for Audit Quality CAQ for measuring
audit quality through key indicators 26 .
These key indicators will be provided
to audit committees. ACRA, the oversight
authority in Singapore, made
a framework available that includes
eight AQI and can be used voluntarily
by public company audit committees
from 2016 27 . In 2014 the six largest UK
audit firms mutually agreed to publish
a number of performance indicators
in their transparency reports 28 . A US
audit firm has also already started to
disclose 16 performance indicators
voluntarily 29 .
25 The information is included in a so-called
«Information Paper» under the title «Overview
of Audit Quality Indicators Initiatives;
Update to December 2015 edition». The
2016 Annual Report of «Accountancy Europe»
also deals with this subject (www.
accountancyeurope.eu > publications >
annual report; page 24).
26 www.ifac.org > Global Knowledge
Gateway > Viewpoints > Audit Quality
Indicators.
27 www.acra.gov.sg > Publications > Guides
> ACRA›s Audit Quality Indicators Disclosure
Framework.
28 www.frc.org.uk > home > publications
> FRC Team, Professional Oversight > 30
March 2015 Transparency Reporting by
Auditors of Public Interest Entities: Review
of Mandatory Reports.29 www.pwc.com
> PwC US > Audit and Assurance > Our
focus on audit quality > 2016 Audit Quality
Report.
29
www.pwc.com > PwC US > Audit and
Assurance > Our focus on audit quality >
2016 Audit Quality Report.