It is vital to repair any damage to public confidence in auditing and to prevent ill-judged knee-jerk reactions which could be damaging to both our profession and the capital markets. We should start by using the interest which has been generated to enhance public understanding of what we do and how we do it.
Much of the media comment at the moment is either ill-informed or superficial. Where has reference been made to the requirement in the UK to comply with auditing standards or else face disciplinary or regulatory action? How many ‘informed’ commentators have heard of SAS 240 (Quality Control for Audit Work) never mind read it.
Its pages should provide much reassurance.
In all the column inches about independence where is mention of the requirement since last year for an independent review partner, who does not meet the client, to concur with the key audit decisions on listed company audits? And if better audits are the aim shouldn’t we reasonably ask what is being done to strengthen the hand of the auditor? How, for example, do audit re-proposals help better quality auditing if they beat down the price and the scope?
We must find ways to publicise audit successes without breaching client confidentiality.
I lost count long ago of how many financial statements I’ve got amended or control systems improved over the years. We all have our war stories – let’s start telling them.
Audit committees play an important role. In my experience they have done an excellent job over the past few years in strengthening corporate governance and enhancing audit quality by both challenging and supporting auditors. More visibility of the good work they do would provide reassurance to those unaware of the inbuilt checks on auditor quality and independence. I’ve probably posed more questions than answers but my central theme remains. I don’t believe that we have anything to be defensive about. We have the greatest interest in making sure that any debate about our profession is an informed one. Tell people what you do – they may, at last, find it interesting.
- Rodger Hughes is the UK head of Assurance and Business Advisory Services at PricewaterhouseCoopers