CHANGING THE WAY audits are presented will provide a “wonderful opportunity” to highlight their value, according to ICAS president Sir David Tweedie.
Sir David, who formerly chaired the international accounting standard setters, welcomed the news from its international audit counterpart (IAASB) that it is looking at making audit a more vital part of investment analysis.
An expanded report shows auditors’ discussions with management about their choices in making judgements and on accounting policies should be published.
“At present … the auditors’ report appears to limit responsibility rather than give investors what they might want. The statutory monopoly, the payment model and pressure from management do not encourage the auditor to innovate,” said Sir David.
“Everyone knows a bad audit – now that it’s splattered all over the pages of the press as a company gets into serious trouble, undetected by the auditor,” he added. “But no one knows when there has been a good or outstanding audit.”
He said that he would discuss the issue of “true” auditor independence “next month”.
While everyone values audit quality highly we must be be careful that we don’t let it deter talent. We need to guard against its commoditisation and the threat to a unitary profession
Commissioning and preparing an asset valuation for financial reporting should involve a three way dialogue between the client, valuer & auditor
As a change-agent, internal audit has a lot going for it, but many internal audit functions need to upgrade their skills.
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