Page 17 - AOB 2018 (ENG)

Audit
Oversight
Board
ANNUAL
REPORT
2018

2018 Inspection Highlights

• Conducted regular inspections with a focus on the following economic trends, market concerns
and developments in audit, accounting and regulatory areas:

– The second year implementation of the New and Revised Auditor Reporting Standards which
became effective for audits of financial statements with financial periods ending on or after
15 December 2016;

– PIEs with going concern issues; and

– Utilisation of Data Analytics (DA) tools by the Big-Four Audit Firms.

• Increased the number of special inspections to respond to risks that were newly identified during
2018.

• Actions taken in 2018 included:

– Imposed additional registration conditions on an inspected audit firm and individual auditors,
pending the conclusion of enforcement proceedings. This severe action was taken for the first
time by the AOB due to the severity of the inspection findings and to mitigate potential risks
of failure and potential impact to the capital market;

– Specific remedial measures imposed on certain inspected audit firms and individual auditors;
and

– Referrals of certain inspected audit firms and individual auditors including EQCR partners to
the Enforcement Department due to the severity of inspection findings.

• Issuance of the inaugural 2017 AOB Annual Inspection Report and subsequently the distribution
to all PLCs in an effort to facilitate and enhance the communication and engagement between
Boards of Directors and/or Audit Committees and their auditors. The AOB strongly encourages
Boards of Directors and their Audit Committees to gain an understanding and discuss the findings
as well as trends shared in the report with their respective auditors to ensure that risk areas specific
to its entities are adequately addressed.

PART ONE FOSTERING HIGH QUALITY INDEPENDENT AUDITING IN THE CAPITAL MARKET | 15

T_2018 AOB AR PART 1.indd 15 10/04/2019 5:03 PM