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KPMG, EY show the importance of audit quality and why we should do live reviews

Importance of Audit Quality and performing regular reviews of Internal Audits
Photo by John Schnobrich on Unsplash

The Big 4 audit firms, and audit in general really, have been through a lot over the past number of years. There have been numerous calls for the improvement in audit quality. Followed by very high profile reviews such as the Brydon Review in the UK, and the aptly named Audit Inquiry in Australia. With each of these reviews, pressure also fell on regulators to become tougher on audit firms and ensure there is an overall improvement in the audit quality. Now whilst each of these reviews, and this blog post, focus on external / financial statement audit, the underlying issues and message can be applied to internal audit. You may have recently read about the KPMG Partner who was recently fined by the FRC. Granted, whilst the fine does relate to an audit performed in 2016, part of the issues identified can exist in internal audits also. As mentioned by Accountancy Daily, the breaches by KPMG “concerned KPMG’s failure to apply sufficient professional scepticism, or to obtain and document sufficient appropriate audit evidence”. Only both fronts, the exact same issues can exist in an internal aud