Audit Quality Indicator

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Case 1 Evaluating the Quality of Audit Quality Indicators Audit quality is a hot issue among auditors, regulators and accounting professionals. Audit quality not only affects an individual audit, but also has direct influence on an audit firm. However, sometimes it is not easy to define what a perfect audit should look like and what elements are necessary in evaluating a high-quality audit. Last year, the Center for Audit Quality issued a pamphlet called CAQ Approach to Audit Quality Indicators. The instructions help specify what audit quality means and give auditors the right direction for a qualified audit. Personally, I think all the ten quality indicators interact with each other to some extent. In my understanding, a firm’s leadership and tone at the top indicate the firm’s overall attitude towards audit and the ability of internal quality control. How the firm’s leadership measures the efficiency and effectiveness of audit and the message it tries to communicate with the engagement team significantly affect team members’ formation of inner quality principles. It also has indirect influences on other elements such as the audit training requirement, the allocation of resources, and trends in engagement hours and related time. This indicator can be compared as the school sprit when measuring student quality. The ideas about how a particular school’s leadership measures a good student can definitely change students’ and teachers’ behaviors by following school spirit. I think a good leadership and tone at the top are powerful for shaping team members’ right attitude and ideas regarding high-quality audit. However, it is not the most direct, clear and objective way to measure the quality of an audit. Both knowledge and experience of key members and audit firm training requirements emphasize the importance of auditors’ knowledge level. It means the more

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