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IOSCO reports on transparency of firms that audit public companies

  • IOSCO (International Organization of Securities Commissions) (dark gray) Image

Nov 09, 2015

IOSCO has published a final report, “Transparency of Firms That Audit Public Companies.”

The final report discusses “audit firm transparency reporting,” which is a practice “employed by audit firms to be transparent in their own reporting to investors and other stakeholders about the firm itself, notably, with respect to firm governance and elements of their system of quality control for their financial statement audits.”

According to the final report, an au­dit firm trans­parency re­port should contain in­for­ma­tion that is:

  • “[C]lear, use­ful and pre­sented in suf­fi­cient de­tail to be mean­ing­ful to the dif­fer­ent groups of likely users of the re­port.”
  • “[F]act-based and not po­ten­tially mis­lead­ing.”
  • “[U]n­bi­ased and not ori­ented to­ward mar­ket­ing or sell­ing ser­vices.”
  • “[C]on­cise, spe­cific to the firm and avoids the use of boil­er­plate lan­guage.”
  • “[T]imely, ac­cu­rate and com­plete.”
  • “[B]al­anced in com­mu­ni­cat­ing the au­dit firm’s out­put mea­sures of au­dit qual­ity in ad­di­tion to any in­put mea­sures.”
  • “[S]uf­fi­cient in terms of ex­plain­ing the lim­i­ta­tions of the in­di­ca­tors of au­dit qual­ity, in­clud­ing that the in­di­ca­tors may not be com­pa­ra­ble across au­dit firms.”

For more information, see the press release and final report on IOSCO’s Web site.

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