Quality Management and Peer Review (A5S7)

Overview

Regulators, investors, other capital markets stakeholders and users of the financial statements need accurate and transparent financial information for decision making. One reason that why the capital markets are as efficient as they are today, is that users believe that they can trust audited financial statements, in part, due to the fact that they are audited. The AICPA instituted its Enhancing Audit Quality Initiative in 2014 to help to improve regulator and stakeholder trust when it was being questioned. Education, outreach and changes to the peer review program have helped to increase audit quality over the last 8 years. In early 2021 the Auditing Standards Board issued an exposure draft that would make significant changes to the requirements that firms implement a system of quality control. The new standard will require a risk-based approach to quality management and enhance the guidance on the role of the engagement quality reviewer and the audit partner. This module will discuss these topics including the proposed changes to the quality standards which are expected to be effective in 2024. (Please Note: This module is part of Surgent's Audit Skills Training: Level 5.)

Major Topics:

• AICPA’s Engagement Quality Initiative
• When peer reviews are required and how they work
• Recent deficiencies noted by peer reviewers in audit, review and compilation engagements
• System of Quality Control required by the Auditing Standards Board (ASB)
• Changes to the system of Quality Control proposed by the ASB

Learning Objectives:

• Identify key elements of the AICPA’s Enhancing Audit Quality initiatives;
• Recognize key trends noted in recent peer reviews
• Identify the components of the current System of Quality Control required for firms by the AICPA
• Recognize the proposed changes to the firm’s system of Quality Control