The ever-increasing focus on good corporate governance within organisations requires management teams to act with transparency and accountability in their dealings with the broader public. At QAO, this is a priority and a focus for us. We have just published our third transparency report to demonstrate our commitment to audit quality, continuous improvement and our values.
Most audit firms are required to publish a transparency report each year. While QAO isn’t required to prepare one, we do so as we welcome the openness and scrutiny this process invites.
Our vision is to provide better public services for Queenslanders through independent valued assurance and insights. Our transparency reports help us build trust and confidence with our clients and stakeholders.
What is a transparency report?
Transparency reports aim to provide confidence to the users of financial reports, readers of our reports, members of parliament, and other stakeholders. This is so they can rely on our opinions and reports due to the strong quality management system we employ.
Our transparency reports explain the systems of quality management we use to ensure we undertake audits in compliance with standards, laws, and regulations. We also explain how we use the results of quality findings to improve our learning and development programs. We set high service standards, and maintaining an effective quality management system ensures we deliver on them.
Our third transparency report shares:
- our continued focus to provide our stakeholders with insights into the way we audit and our internal practices and processes that support our governance, independence, and quality frameworks. It showcases the detailed quality review practices we undertook, the outcomes we achieved, and the resulting actions we implemented to improve our audit and assurance practices. These actions also ensure we achieve our goal of providing timely and efficient quality assurance reviews that focus on important areas, such as material classes of transactions, account balances and disclosures, significant risks, and key audit matters
- our strong and continued focus on improving quality management across all of QAO’s activities by investing in our technology products and methodologies to drive audit quality and efficiency
- our continued support for learning and development for all staff and our audit service providers by providing targeted technical and non-technical training to address key quality findings
- an overall increase in the quality review program over all our engagement files. Each year, our engagement leaders are subject to at least one post-audit review (closed file) and each financial audit engagement leader is also subject to one live review (hot review). We also review the systems of quality control in our audit service providers’ firms, and a selection of the work they undertake on our behalf
- a summary of our implementation of the Australian standard on quality management (ASQM). We implemented the new ASQM on 15 December 2022.
What we found for 2021–22
We completed 30 post-audit and assurance (closed file) quality reviews and 17 live audit engagement reviews over the last review period.
Our quality program revealed satisfactory ratings for 87 per cent of the closed file reviews we examined (26 of 30 files), and high-level compliance for the live audit engagement reviews (across 33 performance measures). Four audits did not meet expected quality standards. We are working with our engagement leaders and audit service providers to develop, implement, and monitor actions to improve future audit quality.
Our quality reviews informed us that we need to improve in the following areas:
- assigning appropriate inherent risk ratings to audit assertions
- appropriately testing balances with significant judgements and assumptions
- ensuring tests of controls and tests of detail are performed in accordance with our methodology
- supervising less-experienced staff and reviewing their work in a timely manner.
We communicated the common quality assurance themes to all audit staff and included them in developing our 2022–23 training program. The embedding of our new audit toolkit has allowed us to develop automated reporting to monitor the timely completion and review of audit workpapers.
Read our Transparency report 2021–22
For more information and detail on our quality control systems, quality review practices and results, and how we seek to continuously improve our audit and assurance practices, please see QAO’s Transparency report 2021–22.