The 6 components of Sustainable Audit Quality

Audit quality is the single most important factor in our decision-making, and the key measure on which our professional reputation stands.

A lot has been accomplished since EY launched Sustainable Audit Quality (SAQ) in 2015 as a strategic program focused on improving audit quality. The changes introduced through SAQ have required significant investment and created a positive change for our people and the companies we audit. SAQ is our globally consistent approach to driving the highest level of quality of our work.

SAQ demonstrates our commitment to keeping audit quality as our primary focus. It is the single most important factor in our decision-making, and the key measure on which our professional reputation stands.

SAQ is making an impact, and we are continuously improving our audit quality results. Our mission is to be the highest-quality audit organization in the profession. We are proud of the progress that has been made and know that our efforts are ongoing.

The six components of the SAQ program:

1. Tone at the top
2. Strengthen people capabilities
3. Audit technology and digital
4. Enablement and quality support
5. Simplification
6. Accountability

Tone at the top

It is important to set the right tone from the top by establishing and maintaining a culture underpinned by high-quality, effective risk management and continuous improvement.

Such a culture fosters an environment of confidence, trust and pride which, in turn, enhances mutual accountability and develops high-performing teams.

This is the reason that “tone at the top” is the first component of SAQ and why we place great emphasis on culture, consultation and communication.

By “the top,” we do not just mean the Global Chairman and Chief Executive or the Global Vice Chair for Assurance. The messages conveyed by almost 4,000 audit partners across the globe are equally essential to maintaining a culture that is focused on quality.

A consistent tone from the top helps our people understand that shared values and commitment to quality are central to everything that we do at all levels of the organization.

It is critical that our stakeholders view EY as the leading audit organization in terms of a quality culture, and we are developing a number of initiatives to make this happen.

Strengthen people capabilities

To provide high-quality audits, we need high-quality people. EY is committed to attracting, recruiting, developing and retaining outstanding audit professionals.

Our audit professionals must be knowledgeable and skilled at what they do. In addition, we need them to act with integrity and to demonstrate appropriate behaviors, such as curiosity, good judgment and professional skepticism.

We place a lot of emphasis on supporting our people to develop these skills and make the most of their abilities throughout their career journey.

We understand that not everyone who joins EY does so with the intention of staying with us for their entire career. Nevertheless, whether they stay with us for a few years or a few decades, whether they leave us forever or return at a later date, our aim is to ensure that they are constantly developing during their time with us.

Our people benefit from award-winning learning, as well as coaching and mentoring designed to help them achieve their full potential and enjoy enriching career experiences.

The approach is summed up in EY’s people value proposition: “Whenever you join, however long you stay, the exceptional EY experience lasts a lifetime.”

Simplification

As the world of accounting and auditing becomes more complex, the need for simplification becomes more pronounced.

The pace of standard setting — both accounting and auditing — continues to accelerate, and the scope of regulatory oversight is expanding. New accounting standards are changing the way that certain assets and transactions are recognized, which creates additional work not only for management, but also for auditors.

We are also in the middle of implementing new auditor reporting requirements in many markets and expect significant new auditing standards to be issued.

We are continuously searching for ways to enhance efficiency and effectiveness so that our people can be more productive in the workplace, enhancing their knowledge and skills. The less time they spend on administrative tasks, the more time they have to focus on higher-risk matters.

The simplification of our audit methodology and associated guidance is an important component of our strategy to deliver SAQ. Simplification underpins efficient and effective audit processes that are customized to the requirements of each individual engagement. It also supports consistency of processes on audits.

Where we have applied simplification comprehensively and vigorously within our network, we have already seen a measurable improvement in audit quality.

Audit technology and digital

EY’s audits are powered by leading-edge digital technology. By integrating the latest technologies into our audit processes, we are able to deliver high-quality audits that are agile, efficient and insightful, while meeting both our expectations and the evolving needs of businesses, regulators and investors.

We provide our auditors with the best possible tools to use in their work, which is why we are continually enhancing and upgrading our foundational audit tools including: EY Canvas, our global online audit platform; EY Helix, our suite of data analytics; and EY Atlas, our cloud-based knowledge platform that delivers the latest accounting and auditing content.

We are also investing in emerging technologies such as advanced data analytics, artificial intelligence (AI), blockchain, drones and automation.

We have developed an analytics-driven audit approach. We believe in using technology to its fullest potential to deliver a high-quality audit that puts greater emphasis on risk identification and gives our people the opportunity to demonstrate an increased level of professional skepticism.