IFIAR Releases 2024 Survey on Global Audit Quality Findings, Calls for Continued Improvement

Key Takeaways

• Audit Quality on the Decline: The percentage of audits with findings increased to 34% in 2024, signaling a setback after years of improvement.
• Root Cause Analysis Urged: IFIAR stresses the need for audit firms to address systemic deficiencies by performing deeper root cause analyses.
• Focus on Quality Control Systems: Audit firms are encouraged to strengthen their internal quality control systems to ensure consistent, high-quality audits.
• Target for Improvement: IFIAR’s Global Audit Quality Working Group aims to reduce audits with findings from 32% to 24% by 2027, focusing on continuous improvement.

Deep Dive

The latest report from the International Forum of Independent Audit Regulators (IFIAR) is out, and it doesn’t pull any punches. Released on March 17, 2025, the 2024 Survey of Inspection Findings paints a picture of the state of global audit quality, and it’s not as pretty as many might hope.

In 2024, 34% of audits conducted by member firms of the six Global Public Policy Committee (GPPC) networks were found to have at least one significant deficiency. That’s a rise from 32% in 2023, and a far cry from the 26% observed in 2022. It’s easy to get bogged down in the numbers, but what’s important here is the pattern: after a gradual improvement over the past several years, the tide seems to have turned.

To understand the significance, we have to zoom out. Since IFIAR began tracking this data in 2014, the percentage of audits with findings had been steadily declining, from 47% down to 26% by 2022. The hope was that this downward trend would continue, but the 2023 and 2024 surveys have thrown a wrench in those expectations. So, what happened?

Why Are We Seeing This Increase?

It’s not enough to just note that audits are failing to meet the mark. IFIAR is calling for deeper investigation into why these deficiencies keep cropping up. The answer isn’t just in the surface-level fixes, it’s about figuring out where the real cracks are and addressing those root causes.

According to the report, one big concern is the inconsistency in quality management systems across firms. Audit firms need to do more than just say they’ve improved; they need to prove that their systems are working effectively and are properly embedded into the way audits are done on a day-to-day basis.

Let’s not lose sight of what’s really at stake here. Audit firms aren’t just checking boxes, they’re responsible for maintaining the trust of investors and ensuring the accuracy of financial reporting. So, when audits fall short, it’s not just a technical issue. It completely undermines confidence in the financial markets. If the public can’t trust the audits of major companies, that’s a serious problem for everyone involved.

That’s why IFIAR’s call to action is so urgent. This report isn’t just a collection of numbers, it’s a loud reminder that audit quality is too important to get wrong. And if the industry doesn’t do something about it, we could be looking at long-term damage to the credibility of audits across the globe.

Quality Control and Engagement Inspections

Let’s zoom in on two specific areas IFIAR is focusing on: firm-wide systems of quality control and individual audit engagements. The quality of audits is directly tied to how well audit firms manage their internal controls, and that’s where regulators have zeroed in.

The message from IFIAR is that firms need to take a hard look at their internal systems. If those systems aren’t working properly, the audits won’t be either. And while IFIAR has noted that some improvements have been made, there’s still plenty of room for better, more consistent quality management practices. This is the foundational stuff—getting these internal controls right is step one in improving overall audit performance.

The inspection findings are especially concerning when it comes to audits of Public Interest Entities (PIEs). In 2024, 34% of PIE audits had at least one deficiency. That’s the same as 2023, but it’s far from ideal. These are high-profile audits, and the industry needs to do better. But, to be clear, a finding doesn’t necessarily mean the financial statements were wrong, it just means the auditing process wasn’t up to snuff.

Can Things Get Better?

Here’s the good news though, IFIAR isn’t just pointing out problems - they’re also pushing for solutions. The Global Audit Quality (GAQ) Working Group is actively engaging with the GPPC networks, setting a goal to reduce the percentage of audits with findings to 24% by 2027. It’s an ambitious target, but it’s one that’s built on the idea that change can (and should) happen.

What will it take to get there? First, a deeper dive into the root causes of audit deficiencies. Then, a firm commitment from audit firms to fix those issues and continuously improve their quality management systems. The industry can’t afford to wait for a miracle. It needs to put in the work now to prevent further backsliding.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.