Globalisation plays havoc with electronic data.
The Auditing Practices Board’s new guidance on online financial data has ‘opened the lid of a Pandora’s box’ because of the global nature of the internet, writes Michelle Perry.
Guidelines published today by the APB aimed at clarifying the difference between online audited and non-audited financial data on websites comes in response to the growing number of companies publishing their annual financial statements online.
APB chairman Ian Plaistowe said: ‘There has been uncertainty as to what actions, if any, auditors undertake in relation to the electronic publications of their reports. The APB has issued Bulletin 2001/1 to eliminate this uncertainty.’
Under recent law changes, companies can distribute financial statements electronically. But, because a company’s website can be viewed across the world, companies could be vulnerable to legal problems in different jurisdictions.
Martyn Jones, technical partner at Deloitte & Touche, said: ‘What this does is open the lid on a Pandora’s box. One issue is jurisdictional exposure that companies have. The web can be seen by anyone. The relevant law may vary between countries. The (APB) guidance is recognising a bigger issue.’
More on the APB’s online guidance, page 8.