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Room to improve on common audit weaknesses
A summary of which areas of weakness are most common when reviewing audit files.
Hundreds of audits are reviewed by ICAEW’s quality assurance team (QAD) during audit monitoring visits every year and most of them are found to be satisfactory or acceptable. There is always room for improvement, however, and this article offers a brief reminder of areas where issues were most commonly found during 2019 and the auditing standards (ISAs) they relate to.
Audit Evidence (ISA 500) and Audit Documentation (ISA 230) combine to account for around 90% of the issues found by QAD. The most common significant areas of weakness on audit files relate to audit evidence, in particular: revenue testing, fixed assets, stock and work in progress, and other areas of professional judgement such as goodwill and other intangibles.