Highlights from roundtable discussions with audit committee members

Audit committee members are increasingly discussing and exchanging ideas on current issues in auditing, all of which can only help the profession evolve and drive audit quality.

Audit committees across the country are continuing their discussions on the latest developments in audit quality. Their views are helping to shape the future direction in Canada on topics such as auditor reporting, comprehensive reviews and communications with the auditor.

I participated as a speaker on auditor reporting and communications in the roundtables conducted by the Institute of Corporate Directors (ICD), CPA Canada and the Canadian Public Accountability Board in the fall of 2015. While I was eager to hear what my fellow speakers had to say on the status of comprehensive reviews and other audit quality developments, I was chiefly interested in what participants had to say on current issues. Here’s a snapshot of what I heard.

HOW TO BEST IMPLEMENT NEW AUDITOR REPORTING STANDARDS IN CANADA

  • Audit committees are only just beginning to discuss the proposals with their auditors.
  • There is some support for increased transparency about the audit.
  • An overriding concern is the uncertainty about the direction the United States may take and the implications for dual listed entities.
  • Some participants questioned whether the full benefits of auditor reporting will be realized and valued.
  • There is concern about the potential costs and time required to develop the report.

ANNUAL ASSESSMENTS AND PERIODIC COMPREHENSIVE REVIEWS OF THE AUDITOR

  • Audit committees are enhancing their annual auditor assessments.
  • This is creating better discussions and understanding of the quality of the audit.
  • Comprehensive reviews are being considered but there are few examples so far.
  • There is more understanding of the benefits of comprehensive reviews compared to mandatory tendering of the audit.
  • Audit committees support exploring the potential of audit quality indicators to enhance audit quality discussions with auditors.

COMMUNICATION OF INSIGHTS BY THE AUDITOR

  • The audit has more value than just the opinion on the financial statements, although this is the primary focus.
  • Realizing this value requires a culture of trust and collaboration among audit committees, auditors and management.
  • This communication is not always taking place today due to a variety of factors.
  • Some audit committees seek greater involvement of the auditor with information beyond the audit, for example, with key performance indicators that are now proliferating.

Although the ICD is still tabulating and summarizing the results from the roundtables, it is clear that participants greatly benefited from talking about evolving issues with their peers. Further, the three collaborating organizations will be able to leverage the insightful feedback provided by audit committees across the country. I hope they will be able to work together on projects of mutual benefit in the future.

KEEP THE CONVERSATION GOING

Were you a participant at a roundtable? I would love to hear your perspective on the discussions. What other topics might interest you in the future?

Post a comment below or email me directly.

Conversations about Audit Quality is designed to create an exchange of ideas on global audit quality developments and issues, and their impact in Canada.

About the Author

Eric Turner, CPA, CA

Director, Auditing and Assurance Standards, CPA Canada

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