Washington, DC – Enhanced disclosures, along with related metrics, can promote important dialogue and deepen the understanding of audit quality, according to a new resource published by the Center for Audit Quality (CAQ). The Audit Quality Disclosure Framework assists firms in their ongoing efforts to develop such disclosures, which many accounting firms now provide through annual transparency or audit quality reports.
"Public company accounting firms make significant investments in their people, processes, policies, and technology related to audit quality," said CAQ Executive Director Cindy Fornelli. "Our Framework can facilitate consistency and comparability over time as firms foster transparency and trust by informing the public about their work to maintain and enhance audit quality."
Developed in consultation with a range of CAQ member firms, the Framework adheres to three key principles:
- The Framework is voluntary and illustrative, as opposed to prescriptive or all-inclusive.
- The Framework is flexible, giving firms the ability to tailor the information that is most relevant and meaningful to audit quality.
- The Framework relates to disclosure of a system of quality control at a firm level, rather than at the engagement level.
Under these overarching principles, the Framework provides "Points of Focus" for six elements of audit quality and certain examples of firm-level audit quality indicators (AQIs):
- Leadership, Culture, and Firm Governance
- Ethics and Independence
- Acceptance and Continuance of Clients and Engagements
- Engagement Team Management
- Audit Engagement Performance
This Framework builds on past efforts of the CAQ, its member firms, and others to develop perspectives on AQIs. More information on these efforts can be found at the CAQ's dedicated AQIs resource page.
# # #
About the CAQ
The Center for Audit Quality (CAQ) is an autonomous public policy organization dedicated to enhancing investor confidence and public trust in the global capital markets. The CAQ fosters high-quality performance by public company auditors; convenes and collaborates with other stakeholders to advance the discussion of critical issues that require action and intervention; and advocates policies and standards that promote public company auditors’ objectivity, effectiveness, and responsiveness to dynamic market conditions. Based in Washington, DC, the CAQ is affiliated with the American Institute of CPAs. For more information, visit www.thecaq.org.
Andrew T. Gillies
Director of Communications