Audit needs to respond more quickly to change, new report finds

Monday, Sep 26, 2016 17:00

HCM CITY (Biz Hub) —  Investors prefer ‘binary' audit reports in which the auditor must either commit to a ‘clean' opinion or qualify the accounts, according to a report drawn up using feedback from several conferences held by the Association of Chartered Certified Accountants and Grant Thornton in seven countries.

However, the Future of Audit found in general that users also want more contextual information to explain the process whereby the auditors reached their opinion and the challenges they faced and overcame along the way.

Although audit reports are changing, there is frustration that it is not changing further and quicker, it said.

Users want more disclosure from companies, particularly of non-financial information, such as on sustainability, and forward-looking information, it said.

Users also want assurance that this information is being disclosed fairly and accurately, it said.

Andrew Gambler, head of audit, ACCA UK, told a seminar yesterday in HCM City that the traditional audit process is not delivering enough and investors want insights into how a company could have addressed risks better or where they could have maximised profits.

"Investors want early warning signals and managers want auditors to share valuable insights."

Although enhanced auditor reporting has gone down well in the UK, and is now being rolled out elsewhere, there is a belief that the audit should evolve to enable auditors to provide more valuable insights about a wider range of measures, he said.

"While the traditional approach might reassure regulators and company bosses, its usefulness to investors is shrinking all the time, prompting questions over its future.

"Business leaders expect information in real time, so why do we expect investors to wait months for the audit reports?

"Auditors need to look at how they can use technology to deliver a high-quality audit in a more efficient and timely manner."

The roundtables organised for feedback showed that while there are advantages to developing global rules, standard setters should be sensitive to the fact that countries are evolving at different speeds.

Tran Khanh Lam, general secretary of the Vietnam Association of Certified Public Accountants, spoke about another survey done last year by his association, the ACCA and other international associations on business models for small and medium partners with 531 respondents from countries like Viet Nam, Singapore, Malaysia, Iran, the UK, and others.

The survey highlighted challenges to access to business, talent, partners, and finance.

It also found that the fastest growing services in emerging markets are statutory/voluntary audits, bookkeeping and tax returns and other compliance paperwork. — VNS

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