The percentage of key audit areas in which ASIC identified as lacking reasonable assurance for five Grant Thornton files assessed in the 18 months to 30 June 2018 is 20 per cent. Twenty percent is the average achieved for the six largest firms and is below the industry average of 24%.
As the fifth largest audit firm in Australia, we take the quality and assurance of our audits very seriously. We continue to further invest in audit quality through implementing new technologies, more rigorous root cause analysis, enhancements our own internal monitoring programs and more face-to-face, partner-led, case study based, workshop style audit training in conjunction with online modules and on the job learning.
Transparency and independence is essential for audit quality. We would support a move by ASIC to publish the audit inspection results for all firms inspected, rather than relying on individual firms to self-report.
In an environment of increased transparency around audit quality and in particular ASIC’s inspection program, we believe that ASIC should not only publish the percentages but also be more transparent in providing detailed information relevant to the calculation of these percentages, such as number of files reviewed for each firm and basis of sample selection. We also believe that some changes to the methodology and process of ASIC’s inspection program are required to ensure consistency and comparability, leveraging best practice from the inspection programs of regulators in other jurisdictions.
We believe that a more holistic view of audit quality is important and will be publishing a ‘balanced scorecard’ over various audit quality metrics in our upcoming annual Audit Transparency Report for 2019 – due in October this year. You can find our Audit Transparency Report here.
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Further enquiries, please contact:
National Communications Manager
Grant Thornton Australia
T +61 2 8297 2724