The Audit Oversight Board has issued a warning to an audit firm for failing to disclose complete list of audit engagements during its audit quality rating.
To protect public interest in audit quality, the board has taken action in this regard, said a press release.
According to the details, AOB has taken action against Amin, Mudassir & Co after providing an opportunity to the firm to explain its position in writing as well as an opportunity of being heard. AOB has also directed the firm to submit an action plan made up of substantive measures to ensure that the same mistake is not repeated.
The board conducted an independent inspection of the work carried out to assign a satisfactory audit quality rating to the firm. Upon scrutiny of the list of audit engagements submitted by the firm, it was found out by AOB that the firm failed to disclose five audit engagements.
An Audit engagement not disclosed by a firm cannot possibly be reviewed during the quality control process, therefore, manipulating the disclosure of audit engagements, a firm can manipulate its audit quality rating.
”A complete and accurate disclosure of audit engagements by an audit firm is critical to the integrity of the audit quality review process and registration with the AOB which in turn, provides n audit firm the right to audit the financial statements of public interest companies, which include the largest employers and taxpayers in the country.” said Usman Hayat, CEOÂ AOB.
The evaluation of new engagements is a crucial part of successful practice management. The current debate over the acceptability of auditors providing non-audit services to their audit clients indicates that ethical matters will continue to play an important part in acceptance decisions.