ICAEW targets state of audit in consultation paper

ICAEW is inviting comment from financial experts on the current state of audit for a thought leadership paper on assurance models.

“Over the past three years, ICAEW has been tracking the development of the assurance market. We’ve seen that many different kinds of assurance are on offer, and that savvy businesses are increasingly sophisticated in the way that they coordinate their risks, information flows, and assurance maps,” said the institute, which is using the consultation paper to explore whether the audit of the annual financial statements is sufficient to meet modern needs.

“We know that a great deal can be done. Now we want to know what is useful, and what should be done. That means listening to those who want to hold businesses to account, and it also means listening to the people who decide what kind of assurance to obtain: management.”

Entitled Where next for assurance?, the ICAEW consultation document is looking for comment on:

• The right way to use assurance to meet the needs of the organisation, rather than focusing on the annual report.
• The role of the board in determining the need for assurance, internally and externally, is vital to understanding the future of assurance.
• Getting the right assurance in the right place, by asking the right questions about risks and information flows, and keeping track of the situation with an assurance map.
• Assurance can be provided over risk disclosures or forward-looking information, even if the question asked is different from ‘is this true and fair?’.
• Assurance can add value to narrative information using current principles and techniques, and the skilled judgement of preparers and assurance providers.

The deadline for response to the consultation is 22 July.