A delegation from Abu Dhabi Accountability Authority (ADAA), an independent body mandated to oversee transparency and accountability across Abu Dhabi Government, participated in the 14th meeting of the International Forum of Independent Audit Regulators (IFIAR), held in Washington DC, United States of America alongside over 40 delegations from Member countries and jurisdictions that together conduct independent oversight of public company audits representing approximately 80% of total global market capitalization.
The highlight of the meeting this year was around the Members’ approval to continue developing a proposal to establish an IFIAR permanent secretariat, a matter that has been initially proposed by ADAA in 2011 and continuously promoted by it since.
The three days meeting discussed topics relevant to audit regulations today including the evolving economic and business model of audit firms and audit quality indicators and approved of IFIAR communications policy to enhance external and internal communications and to facilitate IFIAR’s ability to comment on standard setting projects and the ongoing exploration of the potential of a multi-lateral arrangement for information-sharing for investigation and enforcement activities.
IFIAR welcomed the admission of Members from Botswana, the Cayman Islands, Jersey and the Czech Republic bringing the total number of Members to 50.
The IFIAR Meeting was attended by representatives of the Basel Committee of Banking Supervisors, the European Commission, the Financial Stability Board, the International Organization of Securities Commissions, the Public Interest Oversight Board and the World Bank that participated as Observers and presented on their audit-relevant work.
Prominent investor representatives and audit committee chairs from Germany, South Africa, Japan and the United States of America addressed various topics relating to investors’ expectations from audit committees and auditors; and how audit regulators can assist audit committees in performing their jobs.
IFIAR discussed issues with the Global CEOs of the six largest international audit networks, including measuring progress in improving audit quality and driving consistency of execution in audits.
After the meeting IFIAR issued its second Inspection Findings Survey which summarized key inspection results from audits of public companies, including systemically important financial institutions, submitted by IFIAR Members. The Survey reflected continued deficiencies in key areas of audit, and expressed concerns about the implications of the findings for audit quality.
The survey resulted in 1,260 total findings in inspected audits of 989 listed public interest entities, or public companies, and highlighted the following deficiencies:
1. Auditing fair value measurements accounted for 17 percent of total findings;
2. 12 percent of the findings relates to internal control testing; and
3. Procedures to assess the adequacy of financial statements presentation and disclosures accounted for 9 percent of the findings.
“The high rate and severity of inspection deficiencies in critical aspects of the audit, and at some of the world’s largest and systemically important financial institutions, is a wake-up call to firms and regulators alike. More must be done to improve the reliability of audit work performed globally on behalf of public and investors” said Lewis Ferguson, IFIAR Chairman.
IFIAR concluded with the acceptance of the invitation presented by the Chinese Taipei Financial Supervisory Commission to host the next meeting in Taipei, in April 2015.