Audit committees’ concerns about excessive audit costs

Audit committees’ concerns about excessive audit costs

Audit fees… Audit committee chairs want to hear from auditors on a regular basis.

But based on the findings of the Accounting Supervisory Board of Public Stock Companies, they are worried about excessive audit and documentation costs.

The Accounting Supervisory Board of Public Stock Companies has published a report based on its conversations with a group of heads of audit committees last year.

He has pointed out the impact of the corona virus on technology audit in cyber security audit, auditing and accounting standards and communication between auditors and members of the audit committee.

While they repeatedly mentioned the importance of oral and written communication,

It seems about the audit and excessive documentation that comes with the change in audit fees. They have concerns.

This report was presented during the audit professional transition period.

Because as a result of the epidemic, more institutions are forced to conduct remote audits.

At this time, institutions rely more on software and data analysis.

to perform the ever-exhausting task of auditing the client’s accounts,

Also, customer systems are more exposed to cyber security risks during this period.

Innovation and partner rotation are among the areas that some heads of audit committees defined their auditors.

But some other areas that need improvement have been flagged.

Other potential areas of improvement that have been identified

include management of audit operations at the international level

Further help senior audit team members to learn the business,

independence relations,

Auditing some controls over transactions on related parties, excessive auditing or excessive documentation, and creating insight into changes in fees from a positive perspective.

Most audit committee chairs interviewed in the report praised their communications with auditors

And they acknowledged that their auditors’ work was accurate, timely, and at an appropriate level of detail.

According to many heads of audit committees, dealing with new accounting standards, revenue recognition, accounting for rents and expected credit losses is considered challenging and time-consuming for auditors.

In contrast, the implementation of the requirements of the supervisory board or special cases of audit has been carried out by auditors relatively smoothly.

which has caused surprise.

Audit committee chairs had mixed feelings about the technology.

While they acknowledged the potential benefits of using emerging technologies such as data analytics and process automation to improve audit quality and the overall quality of financial reporting, as well as the gap between firm and audit firm technology capabilities.

In this report, some of the heads of audit committees noted that their companies had more advanced technology than their auditors.

But some others have said otherwise, in any case, the heads of the audit committees agreed to a large extent

that companies and auditors need similar levels of technology-oriented capabilities to fully realize the benefits of using emerging technologies.

Many said adjusting their companies to work remotely during the pandemic has created risks from emerging technologies.

With the change of workplace and moving it to home, cyber security risk has been flagged as a matter of great concern.

They also found excessive reliance on technology to be a factor that moderates the auditor’s judgment or doubts.