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IAASB New Auditor’s Report
James Gunn
Managing Director, Professional Standards
Why Change the Auditor’s Report?
Stimulate more robust
interactions and
communication
between auditor and
entity
Enhance p...
The Global Journey
2013
2014
2015
2016
2017
Enhanced reporting by auditor,
management and TCWG (2013)
Enhanced auditor rep...
The New ISAAuditor’s Report – What’s Changed
Key Audit Matters
Matters
communicated with
TCWG
Matters that required
signif...
KAM – Delivering Entity-Specific Information to Users
Consistency
and
Comparability
Relevance and
Usefulness
Boilerplate,
...
Other Key Features of the New Auditor’s ReportAuditor’sReport
Audit Opinion – Required to be presented first
Key Audit Mat...
What We Are Hearing…
“Now much more
engagement
between auditor
and management”
Some initial evidence of
enhanced audit qua...
Enhanced Auditor Reporting and Audit Quality
Process
OutputsInputs
Audit
Quality
TCWG
Auditor
Manage-
ment
Users
Regul-
at...
Implementation Resources
• Auditor Reporting Fact Sheet
• Auditor Reporting “At a Glance”
• Basis for Conclusions
• Guidan...
…A Beginning of a Journey
ISAs fit for
purpose
Transparency &
audit quality
Independent
and challenging
skeptical mindset
Continuing Improvement to ...
www.iaasb.org
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IAASB New Auditor's Report

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James Gunn, Managing Director, Professional Standards, addresses the 6th Brazilian Conference on Accounting and Independent Auditing June 13, 2016, in Sao Paolo, Brazil.

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IAASB New Auditor's Report

  1. 1. IAASB New Auditor’s Report James Gunn Managing Director, Professional Standards
  2. 2. Why Change the Auditor’s Report? Stimulate more robust interactions and communication between auditor and entity Enhance preparer focus on key risk areas and disclosures Enhance communicative value to users Clarify responsibilities, and improve understanding of audit Improve audit quality and professional skepticism Improve relevancy of audit
  3. 3. The Global Journey 2013 2014 2015 2016 2017 Enhanced reporting by auditor, management and TCWG (2013) Enhanced auditor reporting for PIEs (2014) Some “early birds” with new style audit reports under the ISAs including KAMs ISAs come into effect for Dec 2016 year ends Mandatory ‘dry runs” Re-Proposed auditor reporting standards EU – Enhanced auditor reporting for all PIEs come into effect (2017) (May 2016)
  4. 4. The New ISAAuditor’s Report – What’s Changed Key Audit Matters Matters communicated with TCWG Matters that required significant auditor attention Matters of most significance in the audit • Required for listed entity audits, voluntary for others • Areas of higher risk, significant auditor judgement, matters of significant affect on audit • Communication: why matter is a KAM, how addressed, related F/S disclosures • Documentation: Auditor judgements & decisions on KAM
  5. 5. KAM – Delivering Entity-Specific Information to Users Consistency and Comparability Relevance and Usefulness Boilerplate, generic language; not relevant to the entity or audit Entity- and audit specific information of increased value
  6. 6. Other Key Features of the New Auditor’s ReportAuditor’sReport Audit Opinion – Required to be presented first Key Audit Matters – Required for listed entities Going Concern – Additional focus Other Information – Enhanced work effort and new section Responsibilities – In the audit; Independence and ethical obligations; Engagement partner (listed entities)
  7. 7. What We Are Hearing… “Now much more engagement between auditor and management” Some initial evidence of enhanced audit quality, also benefits to corporate governance “Valued new source of complementary information” “Positive experience!” “Visually appealing reports, information clearly signposted, clear and logical structure” Start early, bring management and corporate governance on the journey “Write with the audience in mind” a Innovative approaches welcomed!
  8. 8. Enhanced Auditor Reporting and Audit Quality Process OutputsInputs Audit Quality TCWG Auditor Manage- ment Users Regul- ators Interactions Diagram extracted from: A Framework for Audit Quality: Key Elements that Create an Environment for Audit Quality February 2014
  9. 9. Implementation Resources • Auditor Reporting Fact Sheet • Auditor Reporting “At a Glance” • Basis for Conclusions • Guidance on KAM and Going Concern • Illustrative KAM examples • Targeted publications, e.g., “More Informative Auditor’s Reports – What Audit Committees and Finance Executives Need to Know” ….And More
  10. 10. …A Beginning of a Journey
  11. 11. ISAs fit for purpose Transparency & audit quality Independent and challenging skeptical mindset Continuing Improvement to Meet the Public Interest Proactive quality manage- ment Reinforcing robust communic- ation
  12. 12. www.iaasb.org

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