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New Auditor Reporting Requirements are a Significant Step to Enhancing the Value of Independent Audit

New Auditor Reporting Requirements are a Signific...

On January 15 the International Auditing and Assurance Standards Board (the IAASB) published new and revised auditor reporting standards that represent a 'significant change' that enhances the nature of communications with stakeholders, according to KPMG.


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The new requirements of the International Auditing and Assurance Standards Board (the IAASB)[1] have been introduced to improve transparency and clarity regarding the auditor's responsibilities when performing an audit, and regarding the information that auditors provide to users about the audit.

Commenting on the new reporting standards, Larry Bradley, KPMG's Global Head of Audit, said: "For listed companies, the new requirements represent a significant change in auditor reporting. They introduce a level of transparency that can enable users to better recognize the value of an audit."

The most significant change introduced is the requirement for auditors of listed companies to include in their auditor's report descriptions of key audit matters, which are selected from matters discussed with company directors. The descriptions will outline why the auditor judged the matter to be one of most significance to the audit and how they addressed it. Bradley continued: "The introduction of these descriptions is a significant change in auditor reporting. They provide the means for the auditor to address user demand for more information on the audit."

“With the new requirements in place, auditor reports will in fact become more comprehensible and more interesting to a wider audience. This has been proved by the UK experience, where similar requirements are already in place: some auditor reports prepared by our colleagues were widely discussed in the media and in the investment community,” says Andrei Shvetsov, partner, Head of Audit in Russia and the CIS.

For all companies, the revised auditor's report will include a statement outlining the auditor's responsibilities for 'other information' and their findings, as well as revised descriptions of the auditor's responsibilities and those of company management. For audits undertaken in accordance with International Standards on Auditing (ISAs), the new standard takes effect for annual periods ending in December 2016, although auditors can choose to apply it earlier.

[1] Reporting on Audited Financial Statements – New and Revised Auditor Reporting Standards and Related Conforming Amendments.

About KPMG in Russia and CIS

KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries with more than 162,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
KPMG has been operating in Russia more than twenty years. For the last years KPMG in Russia and the CIS has been one of the fastest growing practices in KPMG worldwide.
In the CIS, KPMG now has offices in Moscow, St. Petersburg, Yekaterinburg, Kazan, Nizhny Novgorod, Novosibirsk, Rostov-on-Don, Krasnoyarsk, Perm, Almaty, Astana, Atyrau, Bishkek, Kiev, Lviv, Yerevan, Tbilisi and Baku, employing together over 4,000 people.

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