To protect public interest in audit quality, the Audit Oversight Board (AOB) has revamped the audit quality control review framework, commonly known as QCRF, of the Institute of Chartered Accountants of Pakistan. In the new framework, governance of the Quality Assurance Board has been strengthened, process for assigning a quality rating has been streamlined, and quality ratings have been redefined.
Audit quality involves public interest because investors, lenders and other stakeholders trust the auditor's opinion that financial statements prepared by a company are giving a true and fair view. There are estimated to be more than 1000 public interest companies, which include all listed companies and non-listed public sector companies. The new framework has been finalized by AOB after extensive consultations that commenced in July 2018.
Under the quality control review framework, reviewers from the ICAP's quality assurance department examine the audit files and policies of the audit firm that seeks a quality rating. Based on the report by the reviewers, the ICAP's Quality Assurance Board assigns a quality rating to the audit firm.
Firms that are assigned a satisfactory rating may register with the AOB and only the registered firms are permitted to audit financial statements of public interest companies. Supervising the ICAP's framework and work done by Quality Assurance Board is a statutory function of AOB.-PR
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