Practitioners’ Forum Steering Committee Emphasizes the Urgency of Improvement in Audit Quality

CPA Julius Tumuhimbise

The Steering Committee of the Uganda Practitioners Forum has most recently considered the fact that the theme of improving audit quality deserves urgent attention.

Audit quality review results released by the Quality Assurance Board of the Institute of Certified Public Accountants of Uganda (ICPAU) reveal that 56% of 181 firms require significant improvement in audit quality, while a paltry 3% are satisfactory.

The results were announced by CPA Julius Tumuhimbise, a member of the Steering Committee of the Practitioners’ Forum, during the 2020 Practitioners’ Forum in January.

The Committee attributed the poor performance of audit firms to:

  • Insufficient partner input
  • Limited appreciation of technical and documentation requirements
  • Failure to devote sufficient time to audit planning
  • Lack of standardised audit programmes which leads to inconsistencies
  • Lack of adherence to audit procedures
  • The inappropriateness of staffing in audit firms
  • Staff turnover
  • Poor quality control measures at both firm level and engagement level.

The Committee proposed the following remedies for performance improvement:

  1. Training of trainers, through training at least one practitioner or manager of each firm to equip the rest of the staff with skills required to execute the audit.
  2. Introduction of a peer review programme for purposes of monitoring of audit quality and sharing experiences between amongst firms.
  3. ICPAU to continuously communicate the urgency of the improvement audit quality.
  4. Developing an interrogative or data analytics software to be used or shared among practitioners, at an affordable rate.
  5. Creation of a centre of excellence comprising a pool of experience auditors who can be consulted for technical aspects.
  6. Joint contribution by all audit firms, towards a common fund to support the above five initiatives.

The Committee also made the following recommendations to the Council of ICPAU:

  1. More stringent sanctions by ICPAU, for firms which consistently produce low quality work.
  2. Clear remediation plans by ICPAU to assist firms improve on audit quality.
  3. A mechanism be instituted to name and shame firms which produce low quality work.

CPA Mark Omona, the Director – Standards and Technical Support at ICPAU explained that audit quality reviews are guided by the Statement of Membership Obligations One (SMO1) issued by the International Federation of Accountants. “Firms must comply with the International Standard on Quality Control 1 (ISQC1), which speaks to good governance and leadership of the firm,” CPA Omona said.

He emphasized that ICPAU interrogates compliance with ISQC1 in various ways, depending on the size of the firm and the nature of activities and focus is on a holistic review of the firm. Findings are raised and recommendations made, based on the audit quality review results.

CPA Omona noted that the poor performance of firms majorly manifests in insufficient documentation. He said that there are remedial and punitive measures for firms which recorded poor performance. Remedial measures include: 6 months period for improvement, twinning recommendations, and further training by ICPAU. After the 6 months’ correction period, the firms will be reviewed by the Institute and failure to improve will then lead to arraignment before the Quality Assurance Board, which will may apply further punitive action, including: formal warning, restriction of the nature of business, and in extreme cases withdrawal of licenses.

CPA Frederick Kibbedi, the President of ICPAU emphasized the commitment of the Council towards quality assurance. “The Council took a bold decision on practical experience required to practice, to the extent that applicants for Certificates of Practice must adequately demonstrate their audit experience and the ability to practice,” CPA Kibbedi said. The President informed practitioners that the Council will commence publication of lists of ICPAU members whose disciplinary cases have been decided.

“In terms of quality, the national agenda is to improve the quality of services that are provided by professional accountants so that when we say that we work in the public interest, the public feels protected when it comes to the quality of work that we provide,” CPA Kibbedi reiterated.

A member of the Institute of Certified Public Accountants of Kenya (ICPAK), CPA Ronald Bwosi, who attended the Practitioners’ Forum advised audit firms to strategically position themselves in order to take advantage of the numerous business opportunities, besides audit and assurance services. He advised ICPAU to increase awareness of the various business opportunities and encourage practitioners to develop various skills. 

Practitioners agreed that audit quality is important for business growth. CPA Tumuhimbise noted that the intangibility of professional service provided by accountants means that the key to meeting client expectations is responsiveness, reliability and quality of the service provided.



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