The drivers of audit quality

The reputation of the audit profession has suffered somewhat over the past decade. Maintaining audit quality and restoring trust in the audit function after the global financial crisis and corporate collapses has thus become a priority, with regulators introducing reforms aimed at re-establishing confidence in the financial reporting system.

Given these events, there is renewed awareness that the reliability of financial reporting by individual firms is crucial to their economic well-being, and that a high-audit quality promotes overall market confidence.

ACCA believes it is vital that we continue to explore the dynamic interaction between the audit process and its various stakeholders, and ways to enhance the value that audit brings to business and society. Practical, real-world research will enable regulatory changes to be more effective, by being evidence-based.

Research has shown that stakeholders’ perceptions of audit quality are critical to maintaining effective and efficient capital markets, and to building confidence and trust in financial reports, which in turn, is crucial for the economic success of both established and emerging firms.

It is also important to audit firms to deliver high-quality audit: it protects brand name and reputation, and relatedly, the ability to attract new clients and retain existing ones.

Research

ACCA and Macquarie University have investigated perceptions of CFOs, auditors and company directors on the drivers of audit quality.

The outcomes of this research have been presented in three reports.

• The Drivers of Audit Quality: Views From Australian CFOs, ACCA, 2014. 
• The Drivers of Audit Quality: Auditors’ Perceptions, ACCA, 2014.
• The Drivers of Audit Quality: Company Directors’ Perceptions, ACCA, 2015.