The auditing and accounting supervisory watchdog has expressed disappointment at the overall standard of audits of public interest entities which it inspected last year.
IAASA's views follows its publication of the results of it 2023 quality assurance review, which looked at seven companies that carry out statutory audits of public interest entities.
It found that overall, 23% of the files inspected needed improvement, up from 11% in 2022.
"The results of the 2023 inspections are disappointing, with 23% of audits inspected requiring improvement," said IAASA chief executive, Kevin Prendergast.
"Our team takes a risk based approach to inspections, seeking to identify where there is a greater risk of poor audit performance, meaning that the results are not representative of the quality of all audits performed."
"Notwithstanding this, clearly there is work to be done to improve the consistency of performance."
Mr Prendergast said IAASA expects audit firms to carry out a robust root cause analysis to address the issues identified.
"We will continue to work with the audit firms under our remit to drive improvements in audit quality," he said.
IAASA carried out 31 inspections of individual audit files last year and of these 24 were graded as good audits.
Seven needed improvement, up from four.
No audit files inspected required significant improvement, IAASA said.
In relation to firmwide systems of audit quality, IAASA raised five firm wide findings last year, with findings raised in four firms.
IAASA’s inspection included an assessment of the design of each firm’s system of quality management and an evaluation of the quality objectives, quality risks and related responses identified.
The reports also include any findings and recommendations around these systems.
They also summarise results from IAASA’s inspection of a sample of audits of public-interest entities performed by each company.
The reports show that while findings of issues in firms’ overall systems of quality have declined, there has been an increase in the number of audit file inspections where improvements were required.
While issues varied across files, there were consistent findings in relation to the review of financial statement disclosure, audit of related party transactions, and communications with those charged with governance, IAASA said.
