AUDIT & ASSURANCE

Moving from quality control to quality assurance lets you advance from auditing and accounting to assurance and advisory.

By Alan Anderson, CPA
Transforming Audit for the Future

For decades, A&A has stood for audit and accounting. It’s been focused on compliance. But sooner than we may want to believe, business owners and stakeholders will be using technology to provide the assurance they need.

This is already happening. To remain viable, we need to move A&A from audit and accounting to assurance and advisory.

MORE: Create a Culture of Audit Quality Assurance | What Quality in Audit Leadership Means | Meet Your Client All Year, Not Just During Audit | Give Advice While Remaining Independent | The New Formula for an Accounting Business | Don’t Risk Losing Good Employees for Bad Clients | Four Questions to Make Your Firm More Successful as a Business | Say Adios to Audit Fee Pressure | Deliver More Audit Value by Getting Out of the Conference Room | Six Essential Elements in Audit Planning | Before the Audit: More Than Just Planning | Five Crucial Attributes for Successful Audit Leadership
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Now all auditors take the quality control standards of our profession seriously. But quality control that only happens at the end is more about satisfying the minimum requirements for compliance. It won’t let you move out of providing the commodity service that clients need to keep their stakeholders happy. Quality at the end doesn’t provide an opportunity to really look under the hood and think about what the client really wants.
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Get a better result in less time.

By Alan Anderson, CPA
Transforming Audit for the Future

For way too long, many firm leaders have equated quality in their audits with making it through the peer review process. Peer review is important, but making quality all about that is like the American car executives whose production lines needed a guy with a rubber mallet at the end of the production line to make sure the door fit right. That’s quality control.

MORE: What Quality in Audit Leadership Means | Business-minded Approach Helps Build a Better Firm | Are You Looking at the Big Picture? | Meet Your Client All Year, Not Just During Audit | Give Your Audit Teams Tasks That Increase Business Acumen | Are You Using the Right Business Model? | Give Advice While Remaining Independent | Stop Mixing Up Your V’s and Losing Your Best People | Empower Your Team by Dumping C and D Clients | The New Formula for an Accounting Business | How to Upgrade C and D Clients | Eleven Types of Audit Clients and Which to Fire | Don’t Risk Losing Good Employees for Bad Clients | Can a Service Center Model Solve Audit Staffing Shortages? | Don’t Take on Audits in an Industry You Don’t Understand
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Quality assurance is making the guy with the rubber mallet irrelevant. The first-time right mindset is taking the Japanese approach and making sure the door is designed so it fits correctly from the beginning.

Quality control is at the end. Quality assurance starts at the beginning and continues throughout the entire process. It’s not a one-time event.
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You can’t build it in at the end.

By Alan Anderson, CPA
Transforming Audit for the Future

“It takes less time to do things right than to explain why you did them wrong.” – Henry Wadsworth Longfellow

Many audit firms think about quality as a task carried out at the end of the audit by the quality control reviewer. The problem with that thinking is that sometimes the QC reviewer misses major problems. For example, I was working with the new QC reviewer at one firm who spent most of the review time looking at the superficial details of formatting and punctuation, but almost disastrously missing a $3 million error that I spotted right away because the relationships between the numbers didn’t make sense.

MORE: Business-minded Approach Helps Build a Better Firm | Are You Looking at the Big Picture? | Meet Your Client All Year, Not Just During Audit | Give Your Audit Teams Tasks That Increase Business Acumen | Are You Using the Right Business Model? | Give Advice While Remaining Independent | Stop Mixing Up Your V’s and Losing Your Best People | Empower Your Team by Dumping C and D Clients | The New Formula for an Accounting Business | How to Upgrade C and D Clients | Eleven Types of Audit Clients and Which to Fire | Don’t Risk Losing Good Employees for Bad Clients
Exclusively for PRO Members. Log in here or upgrade to PRO today.

 

Quality in audit shouldn’t be just an extra step at the end of the audit, but it should be an approach woven into the fabric of the firm. Quality is an attitude of “first time right” that permeates every task and every step in the audit. If you leave quality for the end, you’ll be challenged at delivering quality in your audits.
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Six key insights that could apply to any accounting firm.

By CPA Trendlines Research

An organization’s culture should be one of its most valuable assets. It could also be a make-or-break liability.

And that goes double for audit firms, where integrity and professionalism are all-important.

So it’s troubling when the Public Company Accounting Oversight Board reports steadily worsening Part I.A. deficiency rates among global network firms.

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How much worse? The deficiency rate for global network firms in the U.S. has basically doubled since 2020. And non-affiliate firms are twice as bad.

Part I.A. deficiencies are cited when a firm does not obtain enough audit evidence to support its opinion on a public company’s financial statements or internal controls.
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