Clarity on audit quality critical to auditor choice


31 October 2012: Understanding audit quality is critical to auditor choice, said Deloitte’s National Assurance & Advisory Leader, Cindy Hook, in launching the firm’s first transparency report today.

“In the current environment of constant risk and volatility, directors and audit committees, along with auditors, are subject to increasing levels of scrutiny in discharging their obligations,” said Mrs Hook. “In this environment, a high quality audit is critical and is a shared responsibility of auditors and audit committees in ensuring the capital markets are provided with accurate and reliable information.

“We welcome the Australian government’s decision to require transparency reports from all auditors , as we believe this encourages informed choice and helps focus attention on the drivers of audit quality.

“With our transparency report we are seeking to narrow the audit expectation gap, by making it very clear exactly how we conduct an audit and what the financial markets, regulators and our clients should expect from a Deloitte audit.  We are also looking to raise the bar on expectations of what constitutes a high quality audit, by continuously investing in our audit process.”

The Deloitte Transparency Report 2012 provides relevant information for regulators, management, audit committees and investors to better understand the governance structures, the people and the quality control systems that underlie a Deloitte audit. It also highlights some of the innovations Deloitte is investing in to constantly improve the quality of its audits, including:

  • Data analytics – Deloitte uses sophisticated data analytics to identify the characteristics of financial and business risks within an individual business, and uses the resulting insights to improve the quality and efficiency of the audit and to provide unique perspectives to clients.  
  • Design thinking – Since 2011, Deloitte has trained its senior audit leaders in ‘design thinking’, a methodology that combines empathy, creativity and rationality to create a tailored approach to each audit that results in greater insights, higher audit quality and a unique audit experience for Deloitte’s clients and its people.
  • Clarity in reporting – In an environment of greater risk and increasing compliance obligations, CFOs and directors are looking for more candid views and analysis from their external auditors. A dedicated audit innovation team within Deloitte has created a simple, clear and visual way for it to present audit results to clients and their boards.

“The report highlights our distinctive approach to audit quality,” commented Cindy Hook. “We strive to be different, we collaborate and we are transparent.”

The Deloitte Transparency Report 2012 can be downloaded from the Deloitte website:

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