The Chartered Accountants Australia and New Zealand (CA ANZ) and the Association of Chartered Certified Accountants (ACCA), along with the International Federation of Accountants (IFAC), have recently published a report focusing on the multidisciplinary firm model and its relationship with audit quality.
The research led by the global alliance of accounting organisations also offers insight on how current regulatory frameworks internationally manage risks and how sweeping regulatory changes could have unintended consequences on audit quality.
Organisations highlighted that firms offering both audit and non-audit services were best positioned to deliver robust and reliable assurance, by stating: “the presence of multidisciplinary firms in a large and evolving corporate reporting system fills a valuable market need.”
CA ANZ, IFAC, and ACCA all believe high quality audits need a diverse skill base, in which the multidisciplinary model encompasses one of the best mechanisms to “develop skills, expertise and consistency needed for quality audits.”
The report, entitled Audit Quality in a Multidisciplinary Firm, yet enhanced that rules which have evolved over the past years “mitigate risks associated with audit firms providing non-audit services to some audit clients,” opening the debate on multidisciplinary firm business models.
Maggie McGhee, executive director and governance at ACCA, said: “We welcome a robust debate on these issues that no doubt will continue to be important for the profession and policy makers, and encourage a conversation grounded on the facts.
“ACCA is delighted to publish this report with our colleagues from CA ANZ and IFAC. It is the latest example of the benefits which our alliance creates for our members and our students, as well as for the accountancy profession and the public interest.”
The research stresses the presence of a growing concern regarding audit firms delivering non-audit services to audit clients, in which independence could be compromised in doing so.
Amir Ghandar, CA ANZ Reporting and Assurance leader, said: “The multidisciplinary base of auditing firms is a strength that contributes to audit quality, but firms and the profession at large must continue to actively establish and demonstrate a culture of integrity through governance, transparency, and our core ethics.”
Robust independence rules have evolved over the past two decades to mitigate real or perceived risks of conflict of interest associated with audit firms providing non-audit services, and these should continue to evolve in order to keep pace with public expectations and emerging challenges.”