CAQ Releases External Auditor Assessment Tool for Audit Committees

Posted 28 October 2025 Written by Acts Online
Category Financial and Accounting

Brought to you by SA Accounting Academy: The Centre for Audit Quality (CAQ) has published a revised questionnaire to assist audit committees in performing their annual evaluation of the external auditor.

In terms of the oversight functions required under Section 94 of the Companies Act, No. 71 of 2008, audit committees must ensure the independence and effectiveness of the appointed auditor. The CAQ tool provides a structured framework for committees to determine whether to retain an audit firm by evaluating specific performance metrics and quality indicators.

The assessment tool focuses on four key areas of auditor performance:

  • Qualifications and experience: Evaluating the engagement team’s technical competence and industry knowledge.
  • Quality practices: Reviewing the firm’s internal quality control systems and results from external regulatory inspections.
  • Transparency and communication: Assessing the effectiveness of the two-way dialogue between the auditor and the committee.
  • Professional skepticism: Measuring the auditor’s ability to challenge management assertions and maintain an objective mindset.

The evaluation is intended to go beyond a compliance exercise, fostering a dialogue that strengthens audit quality and enhances the committee’s oversight of the financial reporting process. Committees are encouraged to customize the tool to suit the specific risks and complexity of their organization.

Click here to download the External Auditor Assessment Tool for Audit Committees.

What this means for you, your business, or your clients

  • For yourself: Use the tool’s criteria to self-assess your engagement team’s communication effectiveness and the visible application of professional skepticism during audits.
  • For your business: Audit firms should review these assessment criteria to align their service delivery and transparency reports with the specific expectations of audit committees.
  • For your clients: Advise audit committee members to adopt this structured questionnaire to fulfill their statutory duty under Section 94(7) of the Companies Act to oversee the auditor’s performance.

Originally published at https://accountingacademy.co.za/news/read/caq-external-auditor-assessment-tool-a-tool-for-audit-committees

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