More than 500 team leaders in Big Four firm, PricewaterhouseCoopers (PwC), were involved in providing support for partners and staff caught up in Stage Four lockdown, according to the auditing behemoth’s annual transparency report.
The 50-page transparency report details the structures and processes PwC has in place to ensure audit quality. It includes information about the firm’s risk management policies, audit training regime, details of the firm’s risk management personnel and an explanation of how audit and assurance work is reviewed at checked.
There are also lists of all of the significant audit clients PwC has that spans several pages including 16 authorised deposit taking institutions including Westpac, Macquarie Bank and the Commonwealth Bank of Australia.
Processes impacting on audit quality get reviewed by various authorities and associations, PwC explains, with internal firm reviews being only one of the deep dives into the firm procedures that takes place.
Along with the other Big Four firms, PwC is routinely reviewed by the Australian Securities and investments Commission.
“In its most recent report, ASIC found that there was a risk that PwC audit teams had not obtained sufficient appropriate audit evidence in 18 per cent of the audit areas they reviewed,” the firm notes. “This compared to an average of 26 per cent at the six largest audit firms in Australia.”
Foreign regulators will sometimes accompany the domestic corporate plod with PwC noting the Canadian Public Accounting Board dropped in for a visit in March 2012 with the subsequent report making no adverse findings.
The Public Company Accounting Oversight Board (PCAOB) from the United States reviews firms in Australia that audit entities registered to trade securities in America.
“The most recent inspection was in March 2019. ASIC and the PCAOB jointly reviewed the firm’s quality control system and one engagement, and the PCAOB separately performed further engagement reviews,” the firm says. “The PCAOB has not yet finalised its inspection report. PCAOB reports are publicly available on their website.”
Australia’s professional bodies also get their quality review pound of flesh but they don’t reproduce the work done by other regulators with PwC getting the visited from the Chartered Accountants – Australia and New Zealand and CPA Australia in November 2019. The firm’s transparency report does not outline any outcomes of this professional body review.
The coronavirus hit PwC in the same manner as other businesses with partners and employees forced to work from home. Web-based resources were set up by the firm to support the audit teams that were due to work on the audits of clients.
Initiatives the firm implemented to help staff cope with the lock down isolation included a Postcode Pals program that staff could opt in to so they could engage with colleagues for exercise or activity within the five kilometre radius as prescribed by the Victorian government.
There were a series of reporting challenges that hit PwC’s clients in reporting that included issues related to valuation, impairment issues and also the struggle for businesses to determine whether they had a future beyond the stage for lock down.
“Consistent with our actions on the audits of all listed clients across Australia, our focus on quality also included the introduction of new COVID-specific panels of experienced partners at the planning and completion stages,” the firm’s transparency report says.
“All partners on ASX 200 audits were required to present their audit planning and conclusions to these panels as part of our additional quality measures given the significant judgements and additional complexity.”