PwC: Analysts crave more timely assurance, less boilerplate audit

INVESTORS AND ANALYSTS crave timely assurance and greater narrative reporting than is provided under the current audit model, PwC has claimed.

Its new report, Fresh perspectives on audit: the investors’ and analysts’ opinion, found users value audit up to a point but dismiss boilerplate reporting and bland communication from audit committees, saying “audit reports themselves do not give meaningful information”.

Investors would prefer assurance on performance measures such as upcoming contracts data and core or underlying earnings. There was also great interest in the auditor’s opinion on companies’ preliminary results, as these “would provide more timely assurance at a critical stage in the reporting cycle of a business”.

Additionally, analysts are eager for access to confidential parts of the audit process such as discussions with the audit committee, as long as such disclosures would not reduce the frankness of debate.

Richard Sexton (pictured), UK board member with responsibility for reputation and public policy, said respondents had “laid down the gauntlet” and auditors must accept the challenge of meeting their desire for more timely assurance “no matter how difficult the task to achieve it”.

He called on all market participants to facilitate an assurance and reporting model that adds value to capital markets by engaging in the debate, warning: “We cannot make progress alone.”

PwC carried out 22 “in-depth” interviews with UK investment professionals, representing a cross-section of mainstream and corporate governance specialists from both buy and sell-side, of which 19 were equity focused and 3 are fixed-income experts.

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