Inspection of Audit Firms and Individual Auditors

The AOB conducts inspections on auditors of PIEs and schedule funds to promote high quality audits and reliable
audited financial statements.

CHART 3
Inspection snapshot

In-depth information on the inspection programme, including common inspection findings, results of reviews, trends
analysis and remediation efforts taken by inspected audit firms will be presented separately in the AOB’s Annual
Inspection Report 2023 (AIR).

Inspection Highlights for 2023

(A) Scope

(B) INDUSTRIES

(C) ACTIONS

To mitigate the risk of future failure arising from serious audit quality concerns, the following actions have been
imposed on audit firms and individual partners:

To Mandatory technical consultation to be obtained from the firm’s global network in addressing the appropriate accounting treatment for certain classes of transactions and balances.
Requirement to demonstrate the firm’s efforts to increase competencies and professional scepticism of engagement partners, engagement team members and the Engagement Quality Review (EQR) partners in key areas.
Obligation to reperform specific audit procedures to address the inspection findings and/or to immediately rectify any potential impact on the financial statements of the financial year(s) in question.
Referrals of certain inspected audit firms and individual auditors including EQR partners to the AOB’s Enforcement Department depending on the severity of inspection findings.