PwC New Zealand Releases First Assurance Transparency Report
PwC New Zealand has released its Assurance Transparency Report, a first for a New Zealand firm. The report outlines detailed information about the firm’s audit practice and follows similar publications released across the global PwC network.
The report covers the firm’s work to continually improve, and deliver on, audit quality including:
PwC New Zealand’s governance structure, culture and values, and the quality management systems that underpin how we conduct audit work.
The first Audit Quality Balanced Scorecard which discloses how PwC New Zealand is performing against key measures of audit quality such as internal PwC inspection findings, training requirements and culture for the year to 30 June 2020.
The initiatives the firm has taken over the past 18 months to improve audit quality such as the launch of its independent Audit Advisory Board.
An overview of how the firm has delivered audit quality during the COVID-19 pandemic.
PwC New Zealand CEO and Senior Partner Mark Averill says, “Quality audits are a critical component of a trusted and well-functioning capital market. Stakeholders need to have high levels of confidence in the transparency, objectivity and effectiveness of the audit process.
“The purpose of this report is to provide transparency to our key stakeholders and the broader community on how we conduct our audit work and outline our commitment to continually improving audit quality.
“PwC’s purpose is to build trust in society and solve important problems. As New Zealand’s largest audit practice, we want to be part of providing greater insight into what’s involved in audit and be open about how we are performing against expectations.”
Chief Risk Officer Karen Shires explains expectations of audits are changing and the PwC New Zealand Assurance Transparency Report is part of the firm’s wider, ongoing investment in audit quality.
“Over the past few years stakeholder expectations of audit have been shifting rapidly both in New Zealand and around the world. We recognise there is more to be done to maintain confidence and trust in audit and this report is another important step forward for PwC.”
In the Audit Quality Balanced Scorecard for the year to 30 June 2020, the firm outlines where it sits in relation to a variety of key indicators that are integral to audit quality including:
PwC internal inspections. PwC New Zealand is subject to globally coordinated quality inspections moderated by PwC’s Global Assurance Risk & Quality team. In 2020 no PwC New Zealand audits were rated as non-compliant with PwC’s guidelines and auditing standards.
Audit reporting. Key Audit Matters (KAMs) are important tools for investors to understand the health of a business. They are included in the audit reports of all FMC entities with a higher level of public accountability and provide transparency about the most significant audit matters in financial statements. During the period, PwC New Zealand issued 140 KAM opinions providing insights into the areas of the audit requiring significant audit effort.
Leadership. PwC New Zealand regularly collects feedback on the behaviours that enhance audit quality demonstrated by partners and our specialist support teams. In a recent partner and staff culture survey, 77% of respondents said they believe Assurance partners exhibit positive behaviours.
Training. Continued learning is an important part of delivering quality assurance services. Over the period, PwC New Zealand partners and staff completed an average of 67 hours of assurance training against a minimum requirement of 20 hours.
The Scorecard also covers information about the firm’s audit business and people. For example, it reveals that PwC New Zealand’s audit business accounts for 27% of the firm’s revenue and includes 28 licensed auditors. In addition, the Scorecard shows the firm’s financial assurance partners have an average of 24 years of audit experience - knowledge and expertise are critical to delivering quality audits.
Managing Partner, Assurance, Lisa Crooke adds, “As with any commitment to transparency there may be expectations that we haven’t met or insights that are challenging for us to reveal. Our ultimate goal is that investors, regulators, industry bodies, and the wider market have insight into how we operate and the steps we are taking to improve audit quality.”
She concludes, “This first PwC New Zealand Assurance Transparency Report is part of our journey to provide greater transparency about our New Zealand audit business and we look forward to leading conversations with our clients and other stakeholders about the role of audit in this country.”