The new 'long-form' audit report is the biggest change in audit reporting I've seen in my professional career and one I am really positive about. Back in November, we asked if the new report was a long term solution or whether we could go further. We also said that we were committed to innovation, and that's what we have done.
We have put our commitment to the test by issuing a small number of ‘long form’ audit reports that extend beyond the minimum requirement: audit reports that do not just say what we did in the risk areas, but also say what we found. And we haven’t done this on a mocked-up, illustrative example. They are real, ‘live’ reports to the companies’ shareholders.
In our update “Audit reports – field testing a bold idea” (PDF 1 MB) I explore this innovation in more detail and say that we need a debate about whether this is the future of audit reports.
That debate needs to involve all the stakeholders: the investor community, as they are the shareholders for whom the report is written, and company boards, as the audit is about facilitating the relationship between companies and their shareholders. We also need buy-in from regulators, who would need to revise their standards to require these reports more widely.
Issues to consider
There are plenty of issues to think about:
So I’d be grateful if you would take a few minutes to read through the update, and perhaps leave a comment or view on this page. I appreciate that these are sensitive issues and that the debate might be lively or even disruptive, but I welcome that. There’s no progress without taking the risk of a wrong turn.
Tony Cates - Head of Audit at KPMG in the UK
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.