IFAC Response to IRBA Consultation Paper

IFAC is pleased to respond to Independent Regulatory Board for Auditors (IRBA)’s Consultation Paper, Mandatory Audit Rotation.

IFAC recognizes the crucial role that audit plays in the financial reporting ecology. However, while vital, it is just one element of the supply chain for high-quality financial reporting. Others in the financial reporting supply chain include financial report preparers, organizational management, boards of directors, audit committees, regulators, standard setters, investors, and financial statement users.

Along with auditors, they all have an important role to play in enhancing financial report credibility. Without the appropriate focus and attention given to each of these elements, high-quality financial reporting cannot be achieved. Importantly, the audit—and auditors—should not be looked upon to compensate for shortcomings in the work quality of other stakeholders in the financial reporting supply chain.

IFAC submitted comments and observations about the Consultation Paper and provided an international perspective and examples for IRBA to consider, including on the objectives of enhancing audit quality, the importance of evidence to support regulatory reform and viewpoints advanced made in the consultation paper, and several points to clarify misconceptions about the audit process asserted in the paper.