Professor Arnold Schilder, IAASB chairman, said : ‘This new framework contributes to further progress on the topic by making clear that, while responsibility for performing quality audits of financial statements rests with auditors, audit quality is best achieved in an environment where there is support from and appropriate interactions among participants in the financial reporting supply chain.’

The publication, A Framework for Audit Quality: Key Elements that Create an Environment for Audit Quality, notes that there is no previous definition of ‘audit quality’ that has been universally recognised, partly because of the varying nature of audits, differences in perspectives among stakeholders, and limited transparency about audit work and audit findings.

The framework describes the different inputs, processes, and outputs relevant to audit quality at the engagement, firm, and national levels. It also demonstrates the importance of appropriate interactions among stakeholders, and how they may facilitate improvement to audit quality, as well as perceptions of audit quality. It considers the importance of various contextual factors which potentially affect audit quality, such as laws and regulations, the litigation environment, corporate governance, and the financial reporting framework.

The IAASB says it believes the publication of the framework is in the public interest for many reasons, including assisting in the setting of auditing standards. The IAASB itself intends to use the framework in future revisions to International Standard on Quality Control ISQC 1, Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements, and the International Standards on Auditing (ISAs).

James Gunn, IAASB technical director, said: ‘Our hope is to see continued dialogue on the topic, and that active use of the framework by various stakeholders will result in positive actions in the public interest to achieve a continual improvement to audit quality.’