Page 15 - Inspection Report 2018

enGaGement LeveL trend anaLysis

of audit QuaLity indicators

In 2018, the AOB continued with its engagement level analysis involving audit engagements that were
inspected in 2017 and 2018 to identify common trends relating to audit quality. Through this analysis, the
AOB aims to provide greater insights into key indicators for audit quality.

Profile of Engagements
PIE workload Experience Selected for Analysis
of the audit 4 of EQCR 8
partner • Engagements inspected in 2017 and

2018 with no significant findings
• The workload of an • For an engagement quality (i.e. satisfactory results).
audit partner can affect control review (EQCR) to be
the amount of attention effective, the assigned EQCR • Engagements inspected in 2017 and
that he or she can partner must have relevant 2018 referred to the Enforcement
spend on each of his or PIE audit experience. Department due to severity of
her audit engagement. findings.
• For the inspected
• For the inspected engagements with
engagements with satisfactory inspection
satisfactory inspection results, the majority of the
results, it was noted audit engagements had
that audit engagement assigned experienced EQCR Training and +70
partners generally had partners. These partners development
no more than 4 PIE had at least eight years
audit clients with the of experience as audit • Training conducted by an audit firm is
same financial year-end partners. an important mechanism to develop
as the selected audit and maintain continued competence
engagements being • For the inspected of the audit engagement team.
inspected. engagements with
unsatisfactory inspection • For a majority of the inspected audit
results, some of the EQCR engagements with satisfactory
partners had no prior or inspection results, the average
recent experience being training hours attended by the audit
audit engagement partners staff were above 70 hours per year.
of PIEs.

Partners’ and managers’ 37% Professional qualification of
collective involvement managerial level staff

• The involvement of audit engagement • A professional qualification is an indication that a
partners to lead and supervise the person has acquired the relevant knowledge and skills
performance of audit engagements with the to perform the duties required of the role. In view of the
support of audit managers is a key factor important role played by the managers and directors
that affects audit quality. in supporting the audit partner in the review and
supervision of an audit, it is important for them to be
• For the inspected engagements with professionally qualified.
satisfactory inspection results, the collective
time spent by the audit engagement • For the inspected engagements with satisfactory
partner and the managerial level staff as a inspection results, all audit managers and directors
percentage of total engagement hours were on the audit engagement team have obtained
noted to range from 11% to 37%. their professional qualifications.

AUDIT OVERSIGHT BOARD
ANNUAL INSPECTION REPORT 2018 13

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