AOB survey: Audit staff most important for audit quality

ISLAMABAD: Chief financial officers of public interest companies believe that the staff of the audit firms conducting the audit are the most important factor for the quality of external audits, says a survey done by the Audit Oversight Board (AOB). Interestingly, in an earlier survey conducted last year, audit partners had also said that audit staff is the most important factor regarding audit quality.

One hundred CFOs from across different sectors responded to the AOB survey that was conducted online in January and February this year. Most of these CFOs hold professional accounting qualifications such as CA, ACCA, ICMA, or ICAEW. The companies they work for include some of the largest listed companies in the country.

Nearly 80 percent of the responding CFOs said that the extended auditor’s report, especially the introduction of key audit matters, has made the audit report more useful for stakeholders. Around 65 percent saw the role of IT as substantially growing in the next five years in the preparation of financial statements and their audit. 78 percent CFOs noted that the accounting standards had become highly complex but added that their departments were adequately staffed to prepare high-quality financial statements.

“Audit quality involves public interest because shareholders and lenders rely on audited financial statements of companies for their financial decisions and they trust the external auditor’s opinion that the financial statements prepared by the management present a true and fair view of the company’s financials,” said Usman Hayat, CEO of AOB.

Established in 2016 in line with international practices, AOB is an independent authority regulating audit firms. Only the auditors registered with AOB are authorized to audit the financial statements of a public interest company. AOB and World Bank have recently launched an audit committee toolkit to assist members of audit committees. The detailed results of this survey and the audit committee toolkit are available on the AOB’s website.