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.
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