Monitoring Audit Quality

August 2019

Quality audit engagements are achieved through planning, performing and reporting in accordance with professional standards and applicable legal and regulatory requirements. BDO’s system of quality control consists of the following elements to ensure we are delivering the highest audit quality:

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Inspections are an integral part of our monitoring and remediation processes:

During 2018, we inspected:
 
49% of our partners
   
Across all six regions
   
Representing 152 engagements -
  • 24 issuer clients
  • 107 non-issuer clients
  • 21 employee benefit plan audits
Covered 78% of practice offices
   
Represented approximately 5% of all Assurance hours for period ended March 31, 2018
   
Reviews of functional areas conducted in 15 offices, representing all six regions
 


Focus on Behaviors to Drive Audit Quality

The priorities that we outlined in last year’s report have been effective at driving improvement, and we continue to conduct causal analyses to identify positive behaviors to continually reinforce and address areas for renewed emphasis and continued vigilance:

"" Appropriate level of audit knowledge and experience Sufficient time allocation for project management and appropriate work sequencing and timing Evidence appropriate review controls and control design
"" Appropriate level of supervision and review in alignment with perceived risk Reliance on use of firm guidance and applicable professional standards Appropriate focus on workload management
"" Appropriate exercise of professional skepticism and application of professional judgment framework Performance of robust risk assessment and understanding of significant risk of material misstatements and flow of transactions Adequate integration and review/supervision of information system and tax professionals
Obtaining good understanding of processes, including identifying what could go wrong and related controls Appropriate reevaluation/challenge of certain legacy assumptions and conclusions Emerging areas of risk – e.g., revenue recognition, going concern, taxation and tax reform, Wayfair, etc.
Appropriate partner mindset Thorough completion of firm templates and application of required practice aids & tools