Ernst & Young LLP (EY US) today issued its 2020 audit quality report, Our commitment to audit quality, which reflects the firm’s commitment to continuously improving audit quality, strengthening its system of quality control and serving the public interest.
“As independent auditors, we play an important role in the financial reporting ecosystem, and we embrace the responsibility of serving the public interest: integrity, objectivity and independence are hard-wired into everything we do,” said Kelly Grier, EY US Chair and Managing Partner and Americas Managing Partner. “In today’s unpredictable and rapidly changing business environment, performing high-quality audits remains the highest priority for our teams.”
In the US, we are fortunate to have the strong foundation of the Sarbanes-Oxley Act. Over the almost two decades since it was enacted, significant, demonstrable gains have been achieved in audit quality, investor confidence and the reliability of financial reporting, which have been beneficial to our capital markets. EY US remains committed to audit quality and actively engages with policymakers and other capital market stakeholders on matters of common interest related to high-quality auditing.
During the current global pandemic, the firm’s ongoing commitment to maintaining a strong culture grounded in independence, objectivity and our values is more critical than ever. This year’s report shines a spotlight on our data-first approach, which combines the strength of our technology and the skills of our people to audit more effectively.
“Our audit teams used technology to pivot quickly to working remotely during the pandemic,” said John King, EY Americas Vice Chair — Assurance. “Even in the face of uncertainty, our teams continue to perform high-quality audits that promote trust and confidence in the capital markets.”
Highlights from the report include the following
Acceleration of our data-first approach:
Our data-first approach is transforming the way we audit. Ninety-nine percent of our US public company audit teams used our EY Helix general ledger analyzer in their audits. We also continue to expand the use of data analytics in every phase of the audit to help deepen our understanding of the companies we audit and their financial reporting, enhance risk assessments and obtain audit evidence based on full populations of data.
An ongoing commitment to sustainable audit quality:
EY US is part of a network of member firms that is fully committed to continuous improvement and the delivery of globally consistent, high-quality audits. Our system of quality control is designed to help us consistently perform high-quality audits by:
- Promoting a culture of audit quality
- Preventing and detecting risks to audit quality
- Communicating our expectations to our people, so they can best execute their roles, manage their responsibilities and be accountable for the high level of quality expected of them
Our firm’s system of quality control focuses on all critical aspects of our audit practice that support the execution of quality audits, including client acceptance and continuance, independence, methodology, and training and staffing, among others.
A dedication to diversity and inclusiveness:
Diversity and inclusiveness remain a key pillar of the firm’s strategy and its commitment to delivering high-quality audits. Diverse perspectives, combined with an inclusive culture that promotes a sense of belonging, drive better decision-making and stimulate innovation while minimizing blind spots.
Progress is measured through various metrics, including the percentages of women and minorities we recruit and promote into leadership positions. This year, 59% of the audit professionals EY US promoted to partner or managing director were women or minorities. In campus hiring, 49% of our recruits in fiscal 2020 were women and 34% were minorities, up slightly from the previous year.
A reliance on independent insight and guidance:
Now in its second year of operation, our Independent Audit Quality Committee (IAQC) — consisting of Chair F. William (Bill) McNabb III, Jeanette F. Franzel and its newest member, Dina Dublon — continues to provide EY US with valuable advice and independent perspectives. Firm leaders meet regularly with the IAQC, seeking feedback and advice about aspects of our business, operations, culture, talent strategy and governance that affect audit quality.
In addition, conversations with the IAQC focus on significant risks to the profession such as competitive, regulatory and environmental challenges, including matters related to our global network and the conduct of audits of global companies.
For more information, please see highlights of the report Our commitment to audit quality. The full 2020 audit quality report is also available for download (Note: If using Edge as your browser, select “full screen for better viewing”).
Note to Editors
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