Quality Assurance Network for non-PIE Audit

The Quality Assurance Network for non-PIE Audit (QAN) aims to enhance audit quality by fostering cooperation and exchange of best practice to strengthen the audit monitoring practices among its members which are all professional accountancy organisations (PAOs). The focus is on policies, procedures and methodologies, as well as on the content and structure of working papers in the approach to audit file review.

A key element of the QAN initiative from its launch has been to engage with Public Oversight Bodies (POBs), recognising the shared agenda for audit quality and the POBs’ role of ultimate responsibility.

Specific objectives and components

  • The QAN operates as a cost-effective and self-sustaining initiative to strengthen audit monitoring practices which provide confidence to POBs in continuing delegation to PAOs, with priority focus on policies, procedures, methodologies and the content and structure of working papers and approach to audit file review.
  • It provides a standing network and online community for exchanges between reviewers and a structured series of focused workshop meetings open to audit monitoring staff of QAN participating bodies.
  • It facilitates engagement with POBs to share QAN developments and exchange and resolve practical challenges.
  • Ultimately, the QAN is about addressing “legacy” issues and raising the quality bar, achieving a common understanding on significant issues and risks.

Non-PIE Audits and Quality Assurance under delegated authority 

The non-PIE audit sector constitutes the largest part of the audit market in the EU. According to the European Commission’s Market Monitoring Report (September 2017), only 5% of the total number of registered audit firms in the EU carry out statutory audits of PIEs.

The report also suggests that about 90% of the quality assurance review activity undertaken in the EU relates to non-PIEs, broadly in line with the size of individual member states’ audit markets.

POB delegation of non-PIE audit quality assurance to professional accountancy bodies is the predominant approach across the EU. Data collected by Accountancy Europe indicates that this delegation is used in 18 member states.

Financial Integrity Network

The Financial Integrity Network (FIN) is focused on quality control, quality assurance and monitoring procedures for accountancy services. Underpinning FIN is a concerted effort to support professional scepticism and improve the quality of accounting services.

The FIN  provides a platform for the exchange of views on strategic issues such as appropriate quality assurance structures, funding, gaining member support and effective disciplinary functions. Participation in the FIN seeks to facilitate the sharing of best practice, information and intelligence between PAOs and government agencies (e.g. in pursuance of European Directives and the Financial Action Task Force’s AML recommendations).

Scope of FIN

From the perspective of quality control, quality assurance and monitoring procedures, the following areas of professional services are under the FIN’s scope:

General accountancy services

Professional accountancy services outside of statutory audit, with emphasis on the enhancement of financial integrity – principally accounts preparation and reporting, either through public practice or within businesses.

Tax services

Emphasis is placed on the ethical conduct of professional accountants in the provision of tax services with reference to:

  • tax evasion
  • design and/or promotion of aggressive tax avoidance schemes
  • introduction of national E-Systems

Anti-Money Laundering

Emphasis is placed on both the letter and the spirit of national AML/counter-terrorist financing provisions and regulations.

The FIN was launched in December 2019 in Brussels.

QAN and FIN Events

Information on forthecoming and previous QAN and FIN meetings can be found here.