Deloitte investment in audit quality journey pays off has been saved
Deloitte investment in audit quality journey pays off
17 October 2022 - Johannesburg – Deloitte Africa today released its Transparency Report for 2022, which highlights that the firm has seen its Future Fit investment in audit quality yield notable positive outcomes.
In 2019, Deloitte Africa went through a process of deep introspection which resulted in it embarking on a Future Fit project to improve audit quality. The objective was to become future fit to thrive in a volatile world of mandatory audit firm rotation, coupled with heightened stakeholder, market, and public expectations. Working with local and global advisors with deep experience in Audit Quality, through this project, Deloitte Africa undertook a complete assessment of the strategic direction and the operational structures and processes within its audit & assurance practice. This led to it putting in place solutions and innovative processes to address many of the root causes of the challenges encountered.
As a result of these interventions, Deloitte Africa has seen a pleasing improvement in its Independent Regulatory Board of Auditors (IRBA) results on the selected and inspected audit engagement files over the past few years: from 50% in 2019, 78% in 2021 to now reaching its goal of achieving a 100% audit quality outcome. This follows the conclusion of the review performed by the IRBA earlier this year.
Deloitte South Africa also received no reportable findings at firm level in 2022 with respect to the firm’s systems of quality control. Furthermore, Deloitte Africa was also recently subjected to engagement files and systems of quality control reviews in both our Namibia and Malawi practice offices, receiving satisfactory outcomes.
Audit quality is multi-dimensional, with external inspection outcomes being an important lens for us as Deloitte Africa. The IRBA and other regulator inspection processes serve an important role in the achievement of our shared objectives of improving audit quality and serving the public interest.
“The IRBA results are a demonstration that our commitment and efforts were not in vain. We are immensely proud to have achieved these results which affirm our aspiration to be the undisputed leader in the professional services sector. This outcome strengthens our resolve to keep improving and maintaining that position,” says Ruwayda Redfearn, CEO of Deloitte Africa.
“We believe that the audit function is critical for the smooth functioning of the financial reporting ecosystem as it allows markets players to make informed decisions. This improvement and that of the industry ensures that the South African market is better served,” Redfearn adds as she went on to pay tribute to former CEO, Lwazi Bam, and his previous Exco for laying the foundation for these results over the past two years.
“During this period, the Future Fit project cast a spotlight on the areas within our business where intensified and prioritised actions would allow us to significantly enhance our overall system of quality management as well as drive a superior quality experience,” said Redfearn.
Newly appointed Audit & Assurance Leader at Deloitte Africa, Eric Tshabalala, congratulated all systems of quality control owners for this significant outcome; attributing the success to efforts that were started by his predecessor, Andrew Mackie.
“This is a demonstration of the significant advances we have made in continually raising the standards of quality to serve public interest, deliver confidence and rebuild trust around the questions that matter the most to all our stakeholders,” said Tshabalala.
Speaking to the future, Tshabalala concludes saying: “Looking to 2025 and beyond, we are hoping that our continued investment will deliver consistent levels of quality for our clients across the board. With heightened expectations from our clients, we are conscious that this is by no means the end of the journey and will continue to understand our clients to enable us to provide assurance, insights and ultimately peace of mind for their partnership with Deloitte.”