Auditors should report on risk, governance, the business model and other forward-looking information, finds a new report from ACCA.
The report reflects data gathered from a series of roundtables held during 2010 in key financial markets around the world.
Key findings include:
- Audit needs to be broadened in scope - as well as reporting on historic financial statements, auditors can meet stakeholders' needs better by incorporating into the audit report a statement of responsibilities for reviewing risk management and governance arrangements.
- Greater communication of findings is needed for investors and other stakeholders. Ways need to be found to enable 'red flags' to be raised when auditors become aware of problems.
- The current audit model needs to evolve and ultimately include reporting on real-time information.
- But auditor liability issues need to be addressed if real change is to happen; like all professional advisers, auditors are very conscious of the risk they run in providing their services to business clients.
- There was concern among some delegates about auditors needing to demonstrate ethics, scepticism and independence.