Financial Crime World

Audit Quality Control: A New Era of Accountability

Introduction

In a major breakthrough, the Audit Association “Sodruzhestvo” has introduced new developments in audit quality control, paving the way for improved accountability and transparency in the industry worldwide.

The Proposed Standards

The proposed standards have been tested in audit firms and are applicable to members of the Audit Association “Sodruzhestvo”, according to letter No. 4942 of July 16, 2019. These standards aim to enhance the independence and objectivity of auditors, ensuring that financial statements accurately reflect a company’s financial position.

Building on International Frameworks

The new standards build upon existing international frameworks, including:

  • The International Standards on Auditing (ISA)
  • The International Quality Control Standard 1

These standards address dysfunctional problems in the audit institute, such as cognitive dissonance and conflicts of interest, which can compromise auditor independence.

Industry Expert Endorsement

Industry experts welcome the move, citing its potential to improve stakeholder performance and enhance public trust in the auditing profession. As S.L. Nikiforov, author of “Russian Audit: Cognitive Dissonance”, notes:

“This is a significant step forward in promoting transparency and accountability in the industry.”

Benefits for Auditors

The new standards will also help auditors better manage their workload and prioritize assignments more effectively. According to expert studies, this could lead to:

  • Improved audit quality
  • Reduced costs for companies

Regulatory Alignment

The Ministry of Finance has issued recommendations on the audit of annual financial statements for 2019, which align with the new standards. The list of cases for compulsory audit of accounting (financial) statements for 2019 is also available online.

Conclusion

As the auditing profession continues to evolve, it is essential that regulators and practitioners prioritize quality control measures to ensure accountability and transparency. With these new developments, the industry is poised to take a significant step forward in promoting trust and confidence among stakeholders.