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Auditors 'frustrated' over role says Acca

Wednesday 1 December 2010 - by Andrew Hickley

Auditors need to modernise and broaden the scope of their reports to remove a "clear sense of frustration" over their duties, according to a new report from the Association of Chartered Certified Accountants.

The report finds that audits need to be broadened in scope to incorporate reviews of risk management and governance arrangements of firms, and should also analyse assumptions in the business model of firms to find if a company's expectations are realistic.

The report, which was compiled following a series of roundtable consultations held in Europe, Asia and Africa over the past year, states that auditors are also "very conscious" of the risk they run in providing their services to business clients, believing that they are often wary of exposing levels of liability that may exceed the benefits to the business of performing the audit.

ACCA's head of policy Ian Welch believes that it is "essential" that a pathway to overcoming these problems is identified, saying that auditors must be more willing to take on wider responsibilities in terms of the scope and accountability of the reports they cover.

"There was a clear sense of frustration that more could be done to meet stakeholder needs and that the considerable work that goes into an audit should be better communicated.


"For all the issues and concerns raised over the course of a year, there was no serious questioning of the importance of the role of audit or whether it was necessary.

"But at every roundtable, the spectre of liability hung like a deadweight across discussion."

The report also said dialogue between auditors and regulators needs to be strengthened, and the current audit model must eventually embrace real-time reporting of information to enable companies to "improve and maintain strong credit ratings".


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