BDO audit quality and ASIC inspection findings
29 May 2019
BDO National Audit Leader, Timothy Kendall, responds to ASIC inspection findings.
“At BDO we consider that many factors lead to maintaining and improving audit quality. Whilst the ASIC inspection findings are important, it is just one of many measures that BDO uses to measure how we maintain and improve audit quality.
“The BDO findings in the recent inspection cycle covering the 18 month period ended 30 June 2018, noted that in ASIC’s view, we did not obtain reasonable assurance that the financial report was free of material misstatement in 8% of the key areas reviewed (the result for the six largest firms in this inspection cycle is 20%).
“Over the last three ASIC inspection cycles, BDO’s percentage has not changed significantly, demonstrating a stable position; 8% - June 2018, 5% - Dec 16 and 8% - June 15.
“It is important to remember, and ASIC concurs, that there is more than one measure of audit quality. In addition to the ASIC report, we have our own robust internal inspections program, monitoring programs within our risk and quality group and a range of other risk and compliance activities. We also have an inspection program managed by BDO Global. All these measures indicate that audit quality at BDO is high and the findings over a number of years indicate that this standard has been maintained.
“BDO’s internal audit inspection results have shown a consistent upward trend in the percentage of compliant engagements over the last three years. The number of compliant engagements in 2016 was 93%, 2017 was 95% and 2018 was 100%. (Source: BDO Transparency Report 2018) These findings are generally in line with the ASIC inspection findings.
“We are committed to continually developing and strengthening our internal quality control system to address those areas that continue to require improvement as outlined in our Audit Quality Framework." (Source: BDO Transparency Report 2018).