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The International Auditing and Assurance Standards
Board (IAASB), has recently published an Invitation to Comment titled,
Improving the Auditor’s Report. Through this, IAASB is envisaging
important amendments to the format and contents of the auditor’s report
to make it more informative and a valuable document for the
stakeholders. Among other things, it is exploring the possibility of the
auditors providing greater information on:
- Matters that are, in the auditor’s judgment, likely to be most
important to users understanding of the audited financial statements or
the audit of public interest entities;
- Auditor’s conclusion on appropriateness of management’s use of going concern assumption;
- Auditor’s statement on existence of any material inconsistencies between audited financial statements and other information;
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for which it is proposing new sections titled Going Concern, Auditor Commentary and Other Information in the audit report.
In
addition it is also exploring the manner in which greater transparency
about the audit process can be reflected in the audit report through
suggestions such as in case of group audits, the extent of work done by
the component auditors vis a vis principal auditor.
IAASB is also
exploring if a change in the placement of the opinion paragraph vis a
vis auditor’s / management’s responsibility paragraphs in the audit
report could enhance the value of the audit report.
Based on the feedback received, IAASB would propose amendments to its reporting standards, particularly, ISA 700.
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