Investors demand more colourful audits

Audit reports should be more colourful, with detailed expressions of the
controversies and arguments that lead to an audit’s sign-off, rather than bland
boilerplate announcements, investors have said.

The call is made in a discussion paper issued by the Audit Quality Forum,
headed by Gerald Russell on the future of audit reports, published this week.

The draft paper states that shareholders have expressed a desire for greater
disclosure, including that of future risks and ‘details of difficult, sensitive
and contentious issues’.

The paper says: ‘Some shareholders have expressed a desire for more
discursive information within the audit report, which would include matters that
auditors have discussed with the audit committee.

‘They would like to see information on matters of emphasis; reference to
uncertainties and future risks; details of difficult, sensitive and contentious
issues; a discussion of the accounting treatments considered and those
eventually adopted; and other material issues encountered during the course of
the audit.’

The paper additionally called for the wording of reports to be much more

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