PracticeAuditWatchdogs warned against ‘unilateral’ stance on audit reports

Watchdogs warned against 'unilateral' stance on audit reports

Reform should not be undertaken in isolation, says Ernst & Young

The UK regulators have been warned they cannot go it alone on reforming
corporate audit reports.

The warning comes from Ernst & Young audit partner Alister Wilson who
said at a time when Europe is working on the adoption of International audit
standards (ISAs) the UK should not be taking a lone stance on a central plank of
the new rules.

“Just as we are at a stage where Europe is proposing to adopt ISAs, the UK
should not be declaring UDI (a unilateral declaration of independence) on one of
the most important parts of ISAs – namely the form and content of the audit
report,” Wilson said in a statement.

“Any initiative to reform audit reporting should be done under the auspices
of the IAASB. Any moves towards changing the audit reporting in the way
envisaged needs to be reviewed in the context of the auditor liability regime as
a whole.”

Last week Accountancy Age reported that investors were leading a campaign to
bring in tailor-made audit reports which go beyond the usual boilerplate
statements.

The reports are written by auditors for company annual reports. The
Association of British Insurers said the reports convey “limited” information
and vary little from one company to another.

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