Enhancing Audit Quality: A 6-Point Plan to Improve Audits
The AICPA has developed a new and improved plan to conduct audits, which are the central point of the CPA profession. This framework was created to achieve a higher level of performance particularly in the private sector, including not-for-profit organizations and governmental entities. The goal of the new plan is to continue to provide the utmost level of service to the public and retain the trust that CPA’s have received throughout time. The AICPA has gained information through comments and professional group discussions in order to form the plan.
One way that the AICPA has decided to improve audits is to increase the standards of licensure. This includes both education and the CPA exam. In education, there are plans to offer advanced placement courses in accounting in high schools. There are also improvements to college-level courses recommended, including more hands-on experience. In 2017, there will be a new version of the CPA exam. This improved exam will focus more on the application of knowledge that will be used in the field. This step in improving the audit process will develop strong professionals that are ready to take on the world of public accounting.
Standards and ethics
The AICPA is developing more ways to help audit professionals better understand quality control standards that are expected to be utilized. This includes additions to the Statements on Quality Control Standards, such as providing different standards based on firm size and industry. The Accounting Standards Board is also in the midst of improving generally accepted auditing standards to better clarify auditor responsibility. A new version of the AICPA Code of Professional Conduct has been released online as well to offer easier use and convenience.
CPA learning and support
Another improvement that the AICPA is working towards deals with continuing education. There is now an AICPA/CIMA Competency and Learning website to assist CPA’s in learning more about the profession and specific industries. There is also development in changing the way continuing professional education is conducted, .
The improved audit plan also includes a better peer review process. The process will have increased qualifications of reviewers in order to increase oversight of professionals in the field. Reviews will be used to help other firms learn and offer practices that they can apply to their audits, especially for industry-specific practices. There will also be more focus on timely reviews and testing of internal controls in accounting firms to ensure a high level of audit quality.
Practice monitoring of the future
The AICPA is creating a technology-based quality monitoring tool that will assist firms in evaluating themselves and their auditing practices. This will help them catch any issues quickly and implement changes before the end of their engagements. The program will also protect the public through indicating possible risk factors and offer more effective audits.
The last step in the audit improvement plan is to increase ethics enforcement. This is because all CPA’s must conduct their engagements with the level of ethical conduct outlined in the AICPA Code of Professional Conduct. When an AICPA member is discovered to have violated the Code, they will have repercussions such as more continuing professional education and increased reviews. Some instances may even result in suspension or expulsion of membership.
Article written by Sarah M. Brinson. For additional information contact Robert F. Firely at firstname.lastname@example.org.