Key Areas of Audit Quality to Evaluate

1. Independence and Objectivity

• Ensure the auditor is independent and unbiased.
• Check compliance with ethical standards and independence rules.
• Review non-audit services to avoid conflicts of interest.

2. Competence and Expertise

• Assess the audit team’s qualifications and experience.
• Ensure they understand the industry and business complexities.
• Check if specialists are used for complex areas.

3. Audit Planning and Risk Assessment

• Evaluate if the audit plan addresses key risks.
• Ensure it aligns with business changes or external factors.
• Verify adequate resources are allocated to high-risk areas.

4. Execution of Audit Work

• Check if sufficient evidence was gathered rigorously.
• Review the use of technology like data analytics.
• Ensure work is completed on time and issues are resolved quickly.

5. Communication with Management and Audit Committee

• Assess the quality of updates on findings or challenges.
• Ensure technical issues are explained clearly.
• Check responsiveness to questions or concerns.

6. Professional Scepticism

• Ensure auditors challenge assumptions and investigate issues.
• Avoid reliance solely on management representations.

7. Quality Control Processes

• Review the auditor’s internal quality control reports.
• Check how past issues were addressed by the audit firm.
• Understand how disputes within the team were resolved.

8. Value Added by Recommendations

• Look for constructive suggestions to improve controls and governance.

9. Stakeholder Feedback

• Gather input from management or board members on auditor performance.

10. Overall Effectiveness

• Determine if the audit met objectives on time.
• Check if significant issues were identified and resolved effectively.
• Assess whether the audit improved financial reporting quality.