AICPA peer reviews help CPAs demonstrate that their audit, review, compilation, and attestation services meet professional standards. Peer reviews are a critical part of AICPA’s practice monitoring requirement. Yet, firms and their auditors continue to struggle with a number of issues that could have a negative impact on audit quality and also peer review.
This article will review the five most important areas to firms in terms of having the right technology to successfully complete audits. Then we’ll look at the four most common issues for auditors when it comes to audit quality and having a successful peer review.
The Five Top Audit Solution Needs For Firms
According to a 2020 Wolters Kluwer survey of accounting firms, here are the top five most important areas to firms when completing audit engagements:
- 43% obtaining all necessary data/documents from clients
- 39% data entry and financial statement preparation
- 36% ‘plain English wording’ in checklists and forms
- 30% roll forward key data and the ability to update to newer content
- 28% efficient financial statement disclosure checklist with examples
In response, Wolters Kluwer has innovated to address these top needs expressed by accounting firms. Here’s how our solutions address each area of firm need:
- CCH® ProSystem fx® Engagement manages workpapers, trial balances and workflow from a central hub. It minimizes the time spent work with your client to get PBC documents, automates the dissemination of data to ensure accuracy, and enables auditors to rollover key data for future efficiency. It can increase the efficiency of engagements by as much as 40%.
- CCH Axcess™ Financial Prep is the first cloud-based solution for producing accurate trial balances for business tax returns. It integrates with Xero® and QuickBooks® Online for fast, easy uploading of client data.
- CCH Axcess™ Knowledge Coach PCR streamlines digital workflows for preparation, compilation, and review engagements.
- CCH Axcess™ AutoCheck is a cloud-based financial statement disclosure checklist that helps ensure firms follow all applicable standards when preparing financial statements. It provides robust tailoring for each entity, diagnostics, and roll-forward capabilities.
Biggest Issues For Auditors That Can Impact Peer Review
Through its EAQ initiative, the AICPA educates firms about audit quality and common peer review deficiencies. According to their data, a recent survey of peer reviewers found over half of 400 audits reviewed didn’t comply with risk assessment standards.
Here are the four most common audit quality issues that challenge auditors, according to the AICPA:
- 40% of audit issues occur because auditors fail to understand client internal controls.
- 14% of audit issues are due to an incomplete or non-existent risk assessment.
- 24% of audit issues happen because auditors fail to address risks they uncover by linking audit steps to risks.
- 13% of audit issues are due to auditors’ failure to sufficiently test client internal controls and recognize high-risk areas.
Wolters Kluwer designed the award-winning CCH® ProSystem fx® Knowledge Coach and CCH Axcess™ Knowledge Coach solutions to help auditors avoid these critical audit quality missteps. It helps address the most common risk-assessment violations noted by the AICPA:
- Knowledge Coach requires the identification of internal controls and will remind an auditor if they skip this critical step. It helps auditors understand internal controls with “what if” scenarios.
- Using a proven risk-based methodology, auditors are guided to uncover and assess risks related to entity, environment, and controls. Knowledge Coach prompts the auditor to assess risk at every stage of an engagement.
- Knowledge Coach helps auditors build their audit program in direct response to the risk assessment, linking each step to the corresponding risk.
- Knowledge Coach dynamically assesses and guides the audit plan to ensure internal controls get tested thoroughly.
- TeamMate® Analytics delivers robust, easy-to-use audit data analytics that can handle very large samples and turn hours of testing into minutes.
Wolters Kluwer Integrated Audit Approach Produces Data-Driven Audits
Wolters Kluwer’s patented audit methodology and award-winning audit solutions deliver the highest quality audits possible, strengthen a firm’s cloud strategy, and drive team collaboration.