Votes cast on key audit questions
We provide a closer insight into the voting at a recent ICAS event on the future of audit and assurance.
At the recent Audit and Assurance: Where Next? event in London, the 60-plus delegates were asked to vote using an electronic system on some of the challenges facing the profession, and what assurance might be provided in years to come.
Here are the results from these voting sessions:
1. Should the current scope of assurance on the annual report be extended and if so how?
Voting revealed that 89 per cent of delegates believed the scope of assurance over the annual report should be extended, with almost one third suggesting that positive assurance should be provided on the whole of the annual report.
The need for users to have credibility and trust in the information they were given was emphasised more than once during the debate.
2. Has FRC’s introduction of the fair, balanced and understandable statement been a positive influence on UK corporate reporting?
When asked whether the FRC’s introduction of the fair, balanced and understandable statement had been a positive influence on UK corporate reporting, 87 per cent of the audience agreed that it had been a favourable move.
However, 43 per cent felt that it would benefit from enhancement or revision of, primarily, the assurance aspects.
There was also a sense that the front half of the annual report still contained too much boiler plate information, with the governance disclosures cited as one example.
3. Is there value in having assurance over KPIs?
When asked if there was value in having assurance over KPIs, 88 per cent of those present felt that receiving some form of assurance would be beneficial.
4. With increasing digital communication, what might a future auditor be asked to assure?
When asked about audit requirements in the future, 35 per cent of attendees selected systems and processes. Only 19 felt felt that market communication might be subject to assurance. The poll found that 17 per cent believed the culture of an organisation might be the subject of greater assurance in the future.
5. What is the greatest challenge to providing assurance over more areas in the future?
The final question sought opinions on the biggest challenge to the provision of greater assurance and 38 per cent of the audience believed that the subjective nature of some of the information was the greater challenge to extending the scope of assurance. This was closely followed, at 34 per cent, by the skills and capacity of the audit profession. However, it was acknowledged that there are other independent assurers who currently provide valuable assurance services on certain aspects of the annual report, so, as a profession accountants need to innovate to ensure that they remain relevant, not just for reasons of self-interest, but for the benefit of the public interest.
So there are opportunities for those in the profession willing to adapt to, and embrace, the technological revolution and the changing user demands in both reporting and assurance.