Richard Fleck, chairman of the Auditing Practices Board, told a committee that, while annual financial statements are an important source of information to investors, their relative importance has probably declined during the past 20 years, ‘and will probably continue to decline in the next 20’, he said.

‘The value of the auditor’s report cannot be higher than the financial statements themselves,’ Fleck said.

The warnings of the value of audits, which are attracting increasing criticism as snapshots that provide little assurance in fast-changing markets, came as Fleck was speaking on a panel discussing issues relating to the structure and finances of accounting firms.

The discussions were part of the Treasury’s dialogue on competition, choice and the future of the US auditing profession.

Fleck also told the panel, chaired by former Securities and Exchange Commission chairman Arthur Levitt that auditors needed to ‘increase the relevance of their work to the financial community’.

Fleck made the point in discussions around the long-term sustainability of the profession. ‘The quality of the staff available to audit firms can only be maintained, or enhanced, if auditors increase the relevance of their work to the financial community,’ he said.

There were also calls for firms to be more transparent about their governance. But Fleck said: ‘There is a danger that audit firms will not respond to the challenge and these reports will just contain “boiler-plate” language’.