In June 2012 the IAASB International Auditing and Assurance Standards Board (IAASB) released Invitation to Comment (ITC): Improving the Auditor’s Report.
The paper seeks feedback on proposed changes to auditor reporting standards and the auditor’s report.
The proposals represent a major shift from current practice—where the auditor’s focus is mainly on providing assurance on financial statements—to one where there will be additional requirements to originate some of the information supporting those statements.
In this podcast, CPA Australia policy advisor Ram Subramanian talks with three people who have been instrumental in the development of the proposals: Prof. Arnold Schilder, Chair of the IAASB; Merran Kelsall, Chair of the Australian Auditing and Assurance Standards Board; and James Gunn, Technical Director of the IAASB.
“We’ve heard four things in terms of messaging,” explains Gunn. “First, the audit is valued but the report itself lacks communicative value.
“Secondly, the expectations gap is alive and well; there is not a clear understanding about what auditors do and the nature of an audit.
“Third, there’s an information gap. Investors and other users know that there is more information about the entity and the audit itself and they’re looking to know and hear about that information.
“And finally, I think there is a real strong sense that given these environments, auditors have a greater role in providing more informative information about their work and their reports to users.”
Want to hear more? Listen to the podcast now and check out the transcript of this Live Chat with Merran Kelsall and Richard Mifsud.