Whether and how the auditor’s report should change has been the subject of much debate since the financial crisis. There is plenty of evidence that investors value the auditor’s opinion on the financial statements. They don’t want to lose it. But in the wake of the financial crises, investors and other stakeholders began to call for auditor’s reports to be more informative. Auditors have unique and relevant insight based on their audits and investors and other stakeholders are asking auditors to share some of that insight.
A new audit reporting standard has been issued in the UK. New auditor's reports are a few years off for the rest of the world, but what those reports will look like is becoming increasingly clear with proposed new standards being released for comment by the IAASB and the PCAOB.
This booklet provides an overview of all of these developments as well as insight into what is being considered in the EU's proposed Audit Directive and Regulation.