Global accounting watchdogs identified serious problems at 40% of the audits they inspected last year, raising fresh concerns about the quality of work being carried out by the world’s largest accounting firms.
According to the International Forum of Independent Audit Regulators (IFIAR), accounting lapses were identified at two-fifths of the 918 audits of listed public interest entities they inspected last year. The audit inspections focused on organisations in riskier or complex situations such as mergers or acquisitions, according to the IFIAR, whose members include 52 audit regulators around the world. The most common issue identified by these regulators was a failure among auditors to “assess the reasonableness of assumptions”. The second biggest problem was a failure among auditors to “sufficiently test the accuracy and completeness of data or reports produced by management”. The findings have intensified concerns about weaknesses in the auditing process, an issue that has been thrust into the spotlight over the past 12 months following a string of high profile accounting failures.
The report showed that 41 per cent of the problems identified by audit regulators last year related to independence and ethics.
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IFIAR´s 2017 Inspection Findings Survey
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