Audit Quality Indicators are quantitative measures about the external audit process. When assessed together with relevant qualitative information, they provide insights about factors that may influence audit quality. Common AQIs include:
For a list of other AQIs, please see the AQI Guide.
AQI use is gaining traction among Canadian audit committees. In 2016, CPAB launched an AQI Pilot with Canadian audit committees, their management and external auditors to get feedback about the usefulness of AQIs and to support broader national and international discussions. Over two years, we had over 18 participants. Based on the results of the Pilot, CPAB believes that AQIs have significant potential to positively impact audit quality.
Learn more about who participated and the results of the Pilot in our Final Report on CPAB’s AQI Pilot.
Other jurisdictions have also explored the use AQIs, including the US. To learn more about AQI use in other jurisdictions, see the Appendix to the AQI Guide.
AQIs are a useful tool that, with proper context and discussion among all stakeholders, can provide insights and facilitate collaboration among auditors, management and the audit committee and provide more in-depth information to assist in evaluating and achieving sustained audit quality.
AQIs can be used for several purposes. Some common objectives include improving general oversight of the audit, increasing the transparency of the audit approach, and providing better information for the purposes of evaluating the external auditor.
To use AQIs, the audit committee, management and the audit firm need to collectively determine the AQIs they want to track and monitor those AQIs throughout each audit cycle.
Additional information about how to implement AQIs can be found in the AQI Guide.
CPAB worked with Canadian public company audit committees to test the use of AQIs. Their real-life experience identified the following benefits of using AQIs:
Learn more about the benefits and challenges of using AQIs in our Final Report on CPAB’s AQI Pilot.
Consult the AQI Guide
Together with CPA Canada and the Institute of Corporate Directors, we developed a short guide to assist audit committees in implementing AQIs for the first time. The Guide provides a step-by-step process to help audit committees and management identify relevant AQIs and establishes a general understanding of how they can be used to spark a discussion both internally and with the external auditor about improving audit quality.
Those interested in using AQIs to assist with auditor evaluation can use the Guide in conjunction with the updated Enhancing Audit Quality (EAQ) publications: