These revised standards respond to calls from users of audited financial statements for more informative and insightful reports.
The IAASB’s revised standards, published on January 16th, include a new requirement for auditors of listed entities’ financial statements to communicate "Key Audit Matters" – those matters that the auditor views as most significant, with an explanation of how they were addressed in the audit. These changes are broadly consistent with the amendments to the FRC’s auditing standards to introduce extended auditor reporting, in 2012 and 2013, which responded to the same calls for change and have been widely welcomed.
Melanie McLaren FRC Executive Director, Codes and Standards added:
“The IAASB is to be congratulated on leading change to the international standards for auditor reporting. They represent the most significant changes to the auditor reporting model at international level for decades. They have the potential to enhance investor engagement about the audit and to provide a catalyst for audit innovation in the interest of investors and the public.
We hope they will be embraced enthusiastically by auditors and investors internationally, as our recent changes to auditor reporting have been in the UK and Ireland. If so, they should herald in an era of greater transparency about the audit for investors in many of the world’s largest capital markets.”
Press release
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