Since 2014, KPMG has sought the opinions and views of stakeholders and investors through a global series of roundtable discussions on the value of the audit report, the audit profession and what needs to change to meet the evolving needs and changing expectations of business, capital markets and society. We have also asked many of our most experienced auditors from across our global network to reflect candidly on where they see audit’s value and what changes should be considered to ensure the audit remains relevant and best serves the public interest. This discussion is critically important to the effective functioning of the capital markets and KPMG is committed to continue to lead the discussion by engaging directly with our stakeholders to listen, learn and play an active role in building public trust.
The audit remains a highly valuable and important part of the workings of the capital markets. However, as both audit stakeholders, investors and KPMG auditors agree, it has to evolve if it is to retain its relevance. Why is this? One of the principal factors is that the audit remains primarily an examination of historical financial information – but investors are looking for more forward-looking and contemporary information. They are as concerned with what drives share price and value creation as with the financial statements, and there is wide recognition that a greater part of a company’s value is either an intangible asset that’s on the balance sheet or some kind of intangible value that’s not even recorded. An audit cannot be more relevant than the information that is subject to the audit – so does its scope need to be widened? And if so, what would need to happen to make this feasible?