06 November 2015

IOSCO reports on transparency of firms that audit public companies

The report addresses audit firm transparency reporting, which considers the practices employed by audit firms to be transparent in their own reporting to investors and other stakeholders about the firm itself.

Transparency reporting can foster internal introspection and discipline within audit firms and may encourage audit firms to sharpen their focus on audit quality, which would be of benefit to investors and other stakeholders. In comparing audit firms competing for an audit engagement, audit firm transparency reporting can aid those responsible for selecting a public company’s auditor in their decision making process by providing information on a firm’s audit quality.

In light of what IOSCO has learned, and consistent with the IOSCO objectives of securities regulation, IOSCO believes that an audit firm transparency report could be considered of high quality if the information in the report includes, among other matters,1 reporting on the following elements: the audit firm´s legal and governance structure, its measures to foster audit quality, its internal indicators of audit quality and indicators of audit quality as generated by the work of external bodies.

Full report

Full press release

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