Auditor Reporting - The IAASB's #1 Priority
Can the auditor’s report be enhanced to provide more meaning and value for investors and other stakeholders? The IAASB believes that it can and has accelerated its Auditor Reporting project to tackle this challenging question.
A call for change—Enhancing the Auditor’s Report
Stakeholders—all users of audited financial statements, but in particular, institutional investors and financial analysts—are calling for more pertinent information for their decision making. They want to know more about individual audits and to gain further insights into the audited entity and its financial statements.
The IAASB understands and embraces the significant need for, and importance of, international leadership on the topic of Auditor Reporting. The board is moving rapidly, in a coordinated and outspoken fashion, in developing a global solution in response to calls for change to the auditor’s report. Check back frequently for updates to this page as the IAASB’s work progresses.
The auditor’s report is the auditor’s primary means of communication with an entity’s stakeholders—as such, it has to be meaningful and have value for them. More than ever before, users of audited financial statements are calling for more pertinent information for their decision-making in today’s global business environment with increasingly complex financial reporting requirements. The global financial crisis also has spurred users, in particular institutional investors and financial analysts, to want to know more about individual audits and to gain further insights into the audited entity and its financial statements. And while the auditor’s opinion is valued, many perceive that the auditor’s report could be more informative. Change, therefore, is essential.
The IAASB understands and embraces the significant need for, and importance of, international leadership on the topic of Auditor Reporting. The IAASB is moving rapidly, in a coordinated and outspoken fashion, in developing a global solution in response to calls for change. Check back frequently for updates to this page as the IAASB’s work progresses.
IAASB Recent Meeting Activity:
Meeting highlights and short audio summaries of key meeting outcomes
- June 2013 meeting highlights and podcast
- February 2013 meeting highlights and podcast
- December 2012 meeting highlights and podcast
- September 2012 meeting highlights and podcast
- June 2012 meeting highlights and podcast
Auditor Reporting News and Events:
- "The Evolving Role of Auditors and Auditor Reporting" - Prof. Arnold Schilder, IAASB Chairman, speaks at the August 2013 CReCER Conference
- "IAASB Proposes Fundamental Overhaul of Audit Reports" - Accounting Today covers the IAASB's release of its auditor reporting exposure draft.
- "Should auditor’s reports include commentary on key items?" - IAASB Chairman Arnold Schilder, Deputy Chair Dan Montgomery, and Technical Director James Gunn discuss issues related to the auditor’s reporting project with Corporate Finance.
- "IAASB roundtable discusses bigger role for auditors" - The Star Malaysia reports from the IAASB round table in Kuala Lumpur.
- "New auditing standards to protect investors" - IAASB Chairman Arnold Schilder is interviewed by the Australian publication Business Day.
- "Audit reporting rules could see duel accounting" - Dan Montgomery, IAASB Deputy Chair and Chair of its Auditor Reporting Task Force, speaks to Accountancy Age on the IAASB’s call for auditor reporting reform.
- "International Auditing Board Seeks Facelift for Auditor’s Boilerplate" - IAASB Chairman Arnold Schilder and Deputy Chair Dan Montgomery are featured in the Wall Street Journal’s CFO Report, where they discussed what the auditor can add to the understanding of financial statements.
- "PwC - The Future of Audit" - Building consensus on the future of audit, Arnold Schilder, Chairman of the IAASB, and Richard Sexton, PwC deputy global assurance leader, share their insights on developments with PwC partner Diana Hillier in three short videos.
AUDITOR REPORTING TIMETABLEAt its September 2014 meeting, the IAASB approved the following new and revised auditor reporting standards:
Subject to confirmation of due process by the Public Interest Oversight Board, the IAASB plans to release the new and revised auditor reporting standards in January 2015. Activities aimed at promoting awareness and understanding, and effective implementation of the new and revised auditor reporting standards are also scheduled to commence in 2015.
- ISA 700 (Revised), Forming an Opinion and Reporting on Financial Statements
- ISA 701, Communicating Key Audit Matters in the Independent Auditor’s Report
- ISA 260 (Revised), Communication with Those Charged with Governance
- ISA 570 (Revised), Going Concern
- ISA 705 (Revised), Modifications to the Opinion in the Independent Auditor’s Report
- ISA 706 (Revised), Emphasis of Matter Paragraphs and Other Matter Paragraphs in the Independent Auditor’s Report
- Conforming Amendments to Other ISAs.
AUDITOR REPORTING QUICK LINKS
- Exposure Draft: Proposed New and Revised International Standards on Auditing
- Responses to the June 2012 Invitation to Comment
- IAASB Auditor Reporting Roundtables
- Invitation to Comment and At a Glance
- Auditor Reporting Project history—including academic research findings commissioned by the IAASB
- IAASB May 2011 Consultation Paper on Auditor Reporting—including responses
- IAASB Fact Sheet