The Financial Markets Authority has published a director's guide to audit quality, setting out the responsibilities for directors and their role in ensuring quality audits.

“This director’s guide sets out key areas for directors to consider, including their role in selecting an audit firm, auditor independence and factors around fees. We strongly encourage directors to read and consider the guidance,” says FMA Director of Capital Markets Garth Stanish.

The FMA has also published its 2017 Audit Quality Monitoring Report, which reviews 7 registered firms and 27 audit files.

It says since it began these reviews in 2013, all audit firms now have systems and policies in place to deliver high-quality audits. However, the FMA says inconsistencies remain in the quality of some individual audits.

The review also focuses on businesses with complex audit or accounting issues where it is more difficult to ensure investors are receiving appropriate disclosure.

The review found firms had made improvements in areas highlighted for attention during previous reviews, showing initiatives implemented by firms are working. However, it is taking time to fully implement policies and to see this applied consistently across all audits, the FMA says.