Ernst & Young LLP (EY US) today issued its 2019 audit quality report, Our commitment to audit quality, demonstrating the firm’s commitment to continuously improving the quality of its audits.
“Performing high-quality audits with independence, integrity, objectivity and professional skepticism is at the heart of our responsibility as auditors to serve the public interest,” said Kelly Grier, US Chair and Managing Partner, Ernst & Young LLP. “One way we fulfill this responsibility is by providing our stakeholders with a better understanding of how we conduct high-quality audits and what we are doing to continuously improve audit quality, which is foundational to our purpose of building a better working world.”
“Enabling our teams to execute a truly digital audit is fundamental to our commitment to improving the quality of our audits. Our audit technology connects audit teams across the globe, helps us develop a deeper understanding of a company’s business and the risks in an audit, and helps us manage our work more effectively,” said John King, US Vice Chair of Assurance, Ernst & Young LLP. “Central to this mission, we are also concentrating on attracting, retaining and developing a diverse mix of highly skilled, exceptional professionals who share our values and are equipped with the next level digital mindset needed to succeed in today’s environment.”
Key highlights from the report include:
- Audit technology: We continue to expand our use of digital audit technology. That means using data analytics in every phase of the audit to help us develop an even deeper understanding of a business and its financial reporting and enhance our risk assessments. Over the past year, EY US teams made significant progress in securely capturing the large amounts of audit-relevant data generated by the companies we audit and using the EY Helix suite of data analytics to analyze full populations of data. As a result, EY US auditors gain a deeper understanding of a company’s processes and can better identify and focus on the most important risks in an audit.
- Audit execution: Our model of having specialists in disciplines such as information technology (IT), tax and valuation, which is global in reach, is critical to our ability to perform high-quality audits of increasingly complex businesses. In fiscal year 2019, EY specialists accounted for a total of 18.4% of US public company audit hours. IT specialists accounted for 10.8% of US public company audit hours. Tax and valuation resources’ time represented 6.4% and 1.2%, respectively, of total US public company audit hours. Our multidisciplinary model gives both EY US and the EY global organization the scale and resources to invest in digital audit technology, including blockchain, robotics, artificial intelligence and other cutting-edge technologies that are reshaping the way EY performs its work.
- Diversity and inclusiveness: Building high-performing teams that maximize the power of diversity and bring together professionals with different experiences, perspectives and skill sets is central to our ability to provide high-quality audits. This year, 54% of the audit professionals we promoted to partner or managing director were women or minorities. In our campus hiring, 48% of our recruits in fiscal year 2019 were women, and nearly 32% of recruits were minorities.
- Independent perspective: EY values independent perspectives and is committed to incorporating them into our efforts to further strengthen audit quality, risk management and our system quality control. Our leaders meet regularly with a three-member EY US Independent Audit Quality Committee (IAQC) and seek the IAQC’s feedback and advice about aspects of our business, operations, culture, talent strategy, governance and risk management that affect audit quality. The members of the IAQC have extensive experience with public company audits and financial reporting and provide a range of valuable perspectives represented in the financial reporting ecosystem.
EY US is continuing to enhance the quality of our audits by simplifying our processes leveraged to identify and address audit risks and, in doing so, better enabling our teams to focus on what matters most in an audit.
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This news release has been issued by Ernst & Young LLP, a client-serving member firm of Ernst & Young Global Limited operating in the US.