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Enhancing Audit Quality Update

Enhancing Audit Quality Update. Susan S. Coffey, CPA, CGMA AICPA Executive Vice President – Public Practice. Enhancing Audit Quality (EAQ) Initiative. Take action. Collect data. Analyze data. Detect trends. aicpa.org/EAQ. 2018 areas of focus. Documentation. Risk assessment. Peer Review.

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Enhancing Audit Quality Update

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  1. Enhancing Audit Quality Update Susan S. Coffey, CPA, CGMAAICPA Executive Vice President – Public Practice

  2. Enhancing Audit Quality (EAQ) Initiative Take action Collect data Analyze data Detect trends aicpa.org/EAQ

  3. 2018 areas of focus Documentation Risk assessment Peer Review Single audits Specialization Auditing in the Future

  4. Enhanced Oversight Program:Year one (2014) 43% of engagements were non-conforming

  5. Moving the quality needle

  6. Reviewers improving detection of non-conformity Percentage of non-conforming engagements detected by peer reviewers

  7. Improved firm quality 90% 77% 86% improvement after continuing professional education improvement after pre-issuance reviewof firm engagements improvement after third-party reviewof engagements or QC documents

  8. Supporting reviewers and firms through change Reviewers: • Continued focus on obtaining feedback • Peer Reviewer pool • PRIMA Firms: • Campaigns to promote compliance • Free tools, resources and learning

  9. Risk Assessment: Encompasses 400+ audits >50% of all audits are non-conforming because of risk assessment

  10. Risk assessment: Our strategies Standards and guidance Free resources at aicpa.org/riskassessment Communication and education Assurance Research Advisory Group (ARAG) Updates to methodologies Emphasis in Peer Review

  11. We are working with a more complete population of firms and engagements Percentage of firms that audit EBPs and are not properly enrolled in peer review

  12. 2018 progress Learn more:aicpa.org/EAQ 2018 mid-year progress report: aicpa.org/EAQhighlights

  13. 2019 areas of focus Auditing Estimates Internal Control Risk Assessment SOC Reports Documentation (including fair value/ valuation & revenue recognition) (including cyber & value supply chain) Continuing from 2018

  14. Staying focused on quality

  15. Susan.Coffey@aicpa-cima.com Thank you

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