AN EXTENDED AUDITOR REPORT will provide “more value” to stakeholders, according Accountancy Age readers.
Of 63 readers that voted, 62% said that auditors need to reveal more detail about potential risk, while the remaining 38% of readers said that auditors cannot rubber-stamp management’s decisions.
Earlier this month, it was announced that auditors would be required to warn investors about the risks within the companies they audit. The new regulations, proposed by the Financial Reporting Council, were ordered as part of a “step change” in the way audit reports are structured.
Criticism that auditors’ reports are uninformative has led to a consultation, launched by the reporting watchdog, to extend their scope to include a commentary of the “risks of material misstatement” identified by the auditor.
Nick Land (pictured), chairman of the FRC’s audit and assurance council, said the new rules would provide a step change from the “traditional binary pass/fail model” of audit report.
He added that the proposals “close the circle” by requiring the auditor to disclose information about the audit, within the auditor’s report itself.
The consultation period will end on 30 April 2013.
Take part in the latest Accountancy Age poll:
UK senior partner Phil Verity has been elected for a second term at Mazars
The ACCA has announced a regular Global Forum focussing on education
ACCA and Morison KSi have signed a global Memorandum of Understanding (MOU) to raise accountancy profession standards
An audit partner has been appointed at Grant Thornton in its North West offices