Article 17 of the Regulation on statutory audit contains the main provisions on the mandatory rotation of audit firms. The Ordinance on Examinations provides for a minimum and maximum duration of audit engagements. An IPA must appoint an audit firm for an initial appointment of at least 1 year, which can be renewed. However, Member States may stipulate that the first commitment must be for a period of more than 1 year. In the past, the majority of certificates issued by audit firms were statutory audits. However, accounting firms are increasingly being asked to provide assurance on written statements other than historical financial statements. Initially, the auditors responded to these requests from other attest services by applying the concepts underlying Generally Accepted Standards on Auditing (GASS). However, as the scope of attestation services increased, it became increasingly difficult to apply GAAPs to these and other attestation engagements. A certified engagement is defined as “an engagement in which an [accountant] practitioner is engaged to issue a written opinion expressing a conclusion on the reliability of a written claim that is the result of another party.” The assurance standards were first published in 1986 by the American Institute of Certified Public Accountants (AICPA) to provide guidance to auditors on how to provide these other attestation services. Accounting firms have earned a reputation for independence, objectivity and integrity in the provision of assurance services, including auditing, and this reputation will strengthen their ability to be the preferred provider of new audit services.

Based on the annual reports for the financial years 2012-2016, we assessed which Dutch listed companies left the audit firm during this period. During each financial year, the Court examined different powers of attorney which could reveal the independence of the audit firm and/or the quality of the audit carried out by the statutory auditor. Footnote 36 An approximation is a possible indicator that is used when the variable to be assessed cannot be (easily) operationalized and measured. This certainly applies to audit independence and quality, as audit quality is considered a credible asset (footnote 37) and because of the lack of publicly available information to assess audit independence and quality. In the United States, audits of publicly traded companies are governed by the rules of the Public Company Accounting Oversight Board (PCAOB) established by Section 404 of the Sarbanes-Oxley Act of 2002. Such an audit is called an integrated audit, which requires the auditor to express an opinion on the effectiveness of an entity`s internal control over financial reporting in accordance with PCAOB Standard on Auditing No. 5, in addition to the auditor`s report on the financial statements. [11] A statutory audit is an “independent audit of the financial information of an entity, whether for-profit or not, regardless of its size or legal form, when such an audit is carried out to express an opinion on it” [1] It also aims to ensure that the group`s books are properly maintained as required by law.

Audit has become such a pervasive phenomenon in business and the public sector that academics have begun to identify an “audit firm.” [2] The External Auditor shall collect and acknowledge proposals submitted for consideration, collect audit evidence, evaluate them and formulate an opinion on the basis of his opinion, which is communicated in his audit report. [3] A project audit provides an opportunity to uncover issues, concerns, and challenges that have arisen during the project lifecycle. [17] A mid-project audit provides the project leader, project sponsor and project team with an interim overview of what went well and what needs to be improved to complete the project. If the audit is conducted at the end of a project, it can be used to develop success criteria for future projects through a judicial review. This review shows which elements of the project were successfully mastered and what challenges they posed. Therefore, the review of the organization will help determine what it needs to do to avoid repeating the same mistakes on future projects. Because of limitations, an audit attempts to provide only reasonable assurance that statements are free from material misstatement. Therefore, statistical samples are often used in audits. In the case of statutory audits, financial statements are said to be true and true if they are free from material misstatement, a concept influenced by both quantitative (numerical) and qualitative factors. But lately, the argument that auditing should go beyond truth and fairness is gaining ground. [9] And the U.S. Public Company Accounting Oversight Board has published a conceptual publication.

[10] There are huge costs associated with rotation […] There also seems to be a high level of lowballing. This is reflected not only in the fulfillment of newly acquired orders (often 50% below the cost of EIPs in the first year!), but also in the return of lost offers, the reason for which is often the price. 15. Before the date of publication of the report, the statutory auditor has completed all necessary audit procedures and obtained sufficient audit evidence to support the statements made in the audit report. A complete and final set of audit documents must be compiled at a time that cannot be retained for more than 45 days after the date of publication of the report ( Documentation Completion Date ). If a report is not prepared as part of a job, the documentation completion date should not exceed 45 days from the date on which the fieldwork was substantially completed. If the statutory auditor has not been able to complete the engagement, the date of completion of the documentation shall not exceed 45 days from the date of completion of the engagement. Other information contained in documents containing audited financial statements This section discusses the auditor`s responsibility for other information contained in documents containing audited financial statements and the auditor`s report thereon.

In the absence of a separate requirement in the particular circumstances of the engagement, the statutory auditor`s report does not cover other information and the statutory auditor is not responsible for determining whether that information is properly disclosed. This section clarifies that the statutory auditor should read other information of which he or she is aware, as the credibility of audited financial statements may be compromised by material inconsistencies between audited financial statements and other information. – a cooling-off period (4 years is the default) during which the audit firm cannot carry out an audit. The Sarbanes-Oxley Act of 2002 was enacted to reform accounting and financial reporting practices in publicly traded organizations and restore public confidence following several high-profile cases of corporate and accounting fraud, and initiated profound changes in corporate governance and accounting practices of U.S. companies [2]. The law created the Public Company Accounting Oversight Board and required all companies conducting audits of U.S. companies to register with the board. It included provisions to ensure auditor independence, increased accountability of officers and directors of publicly traded companies, and revised financial transaction reporting requirements. All these provisions have a significant impact on the audit practices of listed companies and other issuers. Many of the key requirements of Sarbanes-Oxley do not apply to private organizations, although non-public organizations that plan to issue securities in the future or engage in a significant financial transaction such as a sale or acquisition may voluntarily adopt some or all of the requirements of the Act.

From an IT audit perspective, the most important part of the legislation is the requirement for organizations to maintain internal controls over financial reporting and to review the effectiveness of those controls. Cross-training can be used to reduce the knowledge gap between accountants and criminal investigators. Cross-training involves training the auditor in criminal investigations and the criminal investigator in auditing.