PracticeAudit‘Meaningful’ dialogue is not auditors’ role

'Meaningful' dialogue is not auditors' role

Auditors refuse responsibility for 'meaningful communication' with shareholders, following APB's overhaul of audit reports

Auditors do not want the burden of ‘meaningful communication’ with
shareholders added to their responsibilities.

The warning follows the
Auditing Practices
Board
’s overhaul of audit statements, taking out boiler-plate wording. But
the APB also wants to consider what information auditors could add to make
reports more meaningful.

BDO
audit partner Graham Clayworth said accounts ought to ‘tell the whole story. The
danger with auditors putting narratives in audit reports is that these comments
could be misunderstood. The views of auditors could be seen as red flags and
this could lead to unintended consequences.’

He suggested discussions with the audit committee could be communicated in a
report by an audit committee chairman.

‘Those kinds of discussions should also be held by the board and investors.
It is not for auditors to communicate this.’

PricewaterhouseCoopers
director Geoff Swales said it was the company’s responsibility to provide
‘meaningful information’.

Swales added: ‘It should not be left to the auditors alone to include such
information in their report. An emphasis of matter should be used to draw
attention to significant uncertainties disclosed in the financial statements,
such as a going concern uncertainty.’

Grant Thornton
audit partner Steve Maslin said: ‘I think improvements are possible in that
regard but am not convinced at present that the audit report is the best vehicle
for providing that access.’

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