Investors view the audit as an important piece in the puzzle that contributes to their overall confidence in a company's financial reporting. Yet, historically there has been very little direct communication between auditors and the investment community. This independent survey asks investors what they are looking for from auditors, and from financial reporting in general.
Auditors play an important and unique role in the flow of information provided to the capital markets. Auditors are hired by company audit committees, who under US law are responsible for overseeing the audit engagement. Although investors in most companies are provided an opportunity, through the annual meeting proxy, to ratify the audit committee’s selection of the auditor, in the context of any particular audit there is no relationship between a company’s auditors and investors. Moreover, while there is typically a robust interchange between independent auditors, company management and audit committees during the course of the audit, the auditor’s report (which is filed with the company’s annual financial statements) is the only formal communication between auditors and investors.