Transcript APB research into Improving the Audit Report Responses to “Promoting Audit Quality”   Auditing profession appeared comfortable with current approach User groups expressed concerns: – Overly legalistic.

APB research into
Improving the Audit Report
Responses to “Promoting
Audit Quality”
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Auditing profession appeared comfortable
with current approach
User groups expressed concerns:
– Overly legalistic – too many caveats
– Opinion should appear earlier
– Should be more informative regarding
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Estimates
Judgments
Sufficiency of evidence
Uncertainties
APB’s response (1)
THE
AUDITORS
REPORT:
A TIME
FOR
CHANGE?
DECEMBER 2007
The Auditor’s Report: A
Time for Change?
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Explained the evolution of the current
report
Described ‘the changing scene’
Offered a number of alternative
reports to help stimulate debate
Alternative Reports
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Example 1: Fully compliant with ISA
700 (Revised)
Example 2: ISA 700 (Revised) “Lite”
Example 3: Minimum report that
complies with CA 2006
Feedback on The Auditors Report :
A Time for Change
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Views varied by Stakeholder Group
Institutional Investors
– audit reports should be more informative
– favoured reduction in current ‘boiler plate’
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Companies
– favoured reduction in the ‘boiler plate’
– did not support added ‘narrative’
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Auditors
– wanted to achieve compliance with ISAs
– wanted to retain ‘Bannerman’
– many, but not all, wanted to maintain the status quo
APB’s response (2)
THE
AUDITORS
REPORT:
ISA
A TIME
REVISED
(UK &
IRELAND) 700
FOR
CHANGE?
DECEMBER 2007
SEPTEMBER 2008
APB’s Response (2)
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Facilitate shortened versions of auditor’s report (Example 2)
by including ‘boilerplate’ wording on auditor responsibilities
and scope of audit on APB website.
Prepare changes to ISA (UK & Ireland) 700 to allow cross
reference to APB website and still be compliant with ISA 700
Prepare other changes to auditor’s report to
– Reflect CA 2006
– State compliance with APB Ethical Standards
– Separate the true and fair view opinion from other legal
responsibilities (the 2 part report)

Initiate research into what additional ‘narrative’ information
should be included