Improvements were required in 11 per cent of audits of public interest entities (PIEs) last year, according to the findings of a quality assurance review by the sector’s oversight body Iaasa.
Each year Iaasa selects a sample of audits of PIEs by seven accounting firms using a risk-based approach. It uses grades of one to four (requires “significant improvements”). PIEs are companies of significant public interest because of their size and scale, their number of employees or their corporate status.
Last year some 35 audits were reviewed by Iaasa.
Commenting on the findings, Iaasa chief executive Kevin Prendergast said: “The reports again show that the quality of auditing in Ireland remains good, with the inspection grades indicating no or only limited concerns in respect of 89 per cent of the audits of public-interest entities that were inspected by the authority in 2022. That said, there was still a small number of audits of public-interest entities where improvements were required.”
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Iaasa raised findings relating to the systems of quality control in five audit firms. In two firms it made recommendations to “improve the procedures applied by the firm in evaluating the performance of the audit partners and how this evaluation impacts their remuneration”.
In three firms it also made recommendations to improve the “process applied by the firm in obtaining reasonable assurance that the firms and their personnel comply with relevant ethical and independence requirements”.
In addition, findings were raised by Iaasa in the areas of acceptance and continuance and staff evaluation and compensation.
Some 89 per cent of audits of PIEs inspected across the seven firms were assigned a grade of two or higher, indicating that Iaasa had no or only limited concerns. The other 11 per cent were assigned grade three, requiring improvements.
None of the audits inspected in any of the seven firms were assigned a grade of four, which would require “significant improvement”.
