The consultation paper seeks to determine whether there are common views among users of audited financial statements and other stakeholders about the usefulness of auditor reporting. It describes issues with current financial reporting, including a perceived “information gap”, identified by some stakeholders. It then sets out possible options for change, and seeks input as to whether such options might be effective in enhancing auditor reporting and the communicative value of the auditor’s report.

“The auditor communicates to financial statement users primarily through the auditor's report”, noted Prof. Arnold Schilder, IAASB Chairman. “Over the past several years, the IAASB has developed International Standards on Auditing addressing auditor communication and reporting with the aim of addressing the expectations gap and, more recently, of promoting international consistency in auditor reporting. The IAASB believes that now is the time for a more fundamental review of auditor reporting to ensure, in the public interest, that it can meet the information needs of financial statement users in a global business environment with increasingly complex financial reporting requirements.”
 

The IAASB is also seeking information about the potential implications of changes in auditor reporting, as well as about possible implementation challenges. The paper recognises that not all of the options explored are able to be implemented by the IAASB on its own—some would require collaboration with national standard-setters, regulators and/or legislators to develop or implement.
 

“This consultation is aimed at gathering views from around the world to inform the IAASB as to whether there is consensus about the need to enhance auditor reporting and, if so, how an enhanced model might be achieved”, said James Gunn, IAASB Technical Director. “Investors and financial analysts have signalled to us they want additional and more pertinent information for their decision making. The IAASB wants to understand these views better as well the views of others, including users of audited financial statements of small- and medium-sized entities and public sector organisations, preparers, auditors and other key participants in the financial reporting process.”

Press release