Audit needs to adapt or risk becoming “irrelevant”, say experts

by Rachael Singh

More from this author

20 Nov 2012

  • Comments
Bob Dohrer

AUDITORS NEED TO SHOW the relevance of audit reports or risk it being seen as "irrelevant", experts said at a panel debate.

The debate took place at the international network RSM's annual conference, which was attended by 280 delegates from across the profession.

Experts on the panel concurred that the global financial crisis raised issues of trust across the profession and called into question the relevance of audit reports providing an early warning system.

Sitting on the panel, chairman of the International Auditing and Assurance Standards Board (IAASB) professor Arnold Schilder said a greater focus on the risks affecting businesses led to a need for more information, but doubts about the ability of the audit profession to provide meaningful data needed to be overcome.

Bob Dohrer (pictured), global leader of quality and risk for RSM, who chaired the debate, said: "If, as auditors, we are not warning the market of systemic risks, then what is the process there for?

"It is up to us to raise our game – or face greater regulation and public scepticism."

John Capper, executive director of the European Group of International Accounting Networks and Associations (EGIAN), said during the debate that of the more than 160 bailed-out European banks, all received clean bills of health in their audit reports. He added there is now a real danger the profession may have to deal with another set of EU regulations because of the perceived professional failure.

Other members of the panel included Richard Caturano, chairman from the American Institute of Certified Public Accountants (AICPA); Olivier Boutellis-Taft, CEO of the Fédération des Experts Comptables Européens (FEE); and Gu Ren-rong, managing partner of RSM China CPAs.

The panel also discussed mandatory requirements to rotate auditor. Caturano of the AICPA said any firm wanting a greater share of the audit market should focus on having stronger networks and delivering better client service, rather than hoping for regulatory intervension.

However, EGIAN's Capper said that, although he is not in favour of compulsory audit rotation, regulation such as joint audits may be the only way to improve competition in the profession. 

Visitor comments

blog comments powered by Disqus
display:none

Add your comment

We won't publish your address


By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

Submit
  • Send

Financial Planning and Performance AnalystCabinet Office-Greater London-Competitive

 
 
 
 
 
 
 
 

 

Newsletters

Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials

Careers

Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you

Briefings

budget-management

Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.

cchcover

iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.