PracticeAuditInvestors support publication of AIU reports

Investors support publication of AIU reports

Audit Inspection Unit may have to work towards raising its profile as an inspection authority - BDO

A survey of investors has shown overwhelming support of the accounting
watchdog’s efforts to publish its reports of individual audit firms as of next
year.

BDO Stoy Hayward, who conducted the survey, said that a sample of 60
investors and 40 analysts showed that those running the UK’s biggest investment
funds condemn the current lack of transparency on the quality of services
provided by individual audit firms – with nine out of ten supporting proposals
by the Audit Inspection Unit to make this information publicly available.

Three-quarters of those quizzed believe making the information available
would have a positive impact in this area, while a further nine out of ten
consider the information as potentially valuable to the investment community.

However, the study also suggested a distinct lack of awareness of the AIU.
According to BDO, eight out of ten claimed never to have heard of the AIU.

‘The study also suggests that the Audit Inspection Unit may have a task on
its hands to build its own profile to ensure that the reports are considered
authoritative and credible,’ the firm said.

BDO managing partner Jeremy Newman said the findings were ‘clear proof that
the investment community still has concerns arising from the accounting scandals
of the last five years’.

‘According to them, a greater level of transparency around the quality of
individual audit firms is the right way to build trust and allay residual
concerns,’ he said.

‘Whilst proposals to publish AIU reports are undoubtedly a step in the right
direction, it is vital that the public reports contain sufficient detail to be
of real value to investors and other stakeholders. It is also important that
they report on strengths of the audit firms, as well as raising any concerns, if
we are to fully restore confidence in the audit process.’

Further reading:

Audits ‘not documented’ sufficiently says AIU

Big Four back audit inspection moves

Big Four back audit inspection moves

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