ICAEW publishes a paper on extended audit reporting

  • ICAEW (Institute of Chartered Accountants in England and Wales) (lt green) Image

03 Aug, 2017

The Institute of Chartered Accountants in England and Wales (ICAEW) has published a paper to “help preparers and users of extended auditors’ reports in the UK and overseas to implement them and understand them”.

Extended auditor reporting was implemented in the UK in 2013.  The paper recognises “how far the UK has come” from “the short, boilerplate, uninformative report to the extended report covering the Key audit matters over a number of pages”.  As every company and every audit is different, the ICAEW argues that every audit report should be different and hence there is a need to avoid boilerplate content in extended audit reports as much as possible.  To achieve this, the paper indicates that further support for extended audit reports is required. 

The paper highlights that “there is a great deal of appetite and support for making the extended audit reports as insightful as possible” and provides an analysis of the UK experience to date with them.  It also provides guidance on providing insightful reports and sets out a number of calls to action for auditors, regulators, public interest entities, investors, governments, professional bodies and academics “to build on the achievements of extended audit reporting in the UK and implement and maintain it successfully around the world”.

The ICAEW says:

  • Auditors should be “courageous and do their audits justice” by implementing the spirit of extended reporting: transparency in the public interest.
  • Regulators should help by sharing best practice rather than highlighting bad practice,
  • Public interest entities should invest in their reporting as a whole including the audit report so that it tells a clear, concise and consistent story.
  • Investors and professional bodies should promote good practice and professional bodies should also ensure their practitioners are trained in the new requirements.
  • Governments should permit and encourage transparency.
  • Academics should use the data in extended audit reports to “shine a light” on audit quality.

The full report is available on the ICAEW website.

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