- What is an ‘error’ of judgement?
- Why do experts disagree?
- Are auditors being held to a higher standard than other professionals?
Audit quality has become a topic of increasing importance in recent years. The Parliamentary Joint Committee on Corporations and Financial Services Inquiry (PJC Inquiry) into the Regulation of Auditing in Australia Final Report clearly recognised the importance of audit, and the vital role it has in building trust and confidence in information.
This thought leadership paper, authored by Professor Ken Trotman AM, delves deeper into audit quality by exploring audit inspection findings, the increasing complexity of financial reports, and the judgments made by auditors. It also looks at differences in judgments across experts, how other professions deal with these differences, and specific challenges in audit, regulation and standards.
The paper comprehensively examines audit quality from the perspectives of regulators, auditors, audit committees, and users. It also provides some views on going forward, including an evidence-based approach and a broader view of regulatory enforcement and inspections.
The paper highlights the importance of a collaborative effort to enhance audit quality. The paper underlines that regulators continue monitoring audit quality and taking action where necessary, while auditors continue to improve their judgments and decision-making processes.