IRBA 2024 Inspections Report Show Progress in Audit Quality – But Some Gaps Remain
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Here are the key takeaways for accountants:
✅ What’s going well
Audit quality is improving: The number of audit files with good outcomes rose to 45% in 2024, up from 38% in 2019.
Fewer investigations: Referrals to IRBA’s Investigations Department dropped from 14% to 7%, a sign of better audit practices.
ISQM implementation working: The adoption of ISQM 1 and 2 has enhanced firms’ systems of quality management, especially around leadership, risk assessment, and engagement performance.
Firms are being proactive: More firms are actively addressing deficiencies and improving internal processes.
Use of technology: Firms are integrating digital tools to improve audit efficiency and effectiveness.
⚠️ Where improvement is still needed
Some firms haven’t fully implemented effective quality management systems.
Common problems include poor engagement performance, weak documentation, and inadequate risk responses.
Persistent technical issues in areas like revenue recognition, materiality, going concern assessments, and IT controls.
Gaps in professional scepticism and the quality of audit documentation.
Need for better Root Cause Analysis and action plans to fix recurring issues.
🔍 Focus areas
Audit firms are urged to double down on:
Using professional judgement and scepticism, especially in complex estimates.
Conducting effective Root Cause Analysis and linking findings to action plans.
Enhancing senior involvement, leadership accountability, and internal training.
Focusing on culture and tone at the top to embed quality across the board.
👀 Why this matters to you
Reporting quality starts with you as a bookkeeper and accountant. The IRBA report is a reminder that the profession is moving in the right direction, but continuous improvement is non-negotiable. Staying updated on these findings can help you assess your own practice’s readiness, highlight best practices, and address potential weaknesses before they become inspection issues. A strong focus on quality, leadership, and proactive remediation is key to building a trusted and sustainable profession.
Source: IRBA General News
