Hey that’s refreshing! A report that was only just saved from another round of archiving department directories.
By means of this report, we are reminded that 2019 is quite similar – UK English for ‘not a hair different from’ – 2009. Or 1999.
Or so. the latter, maybe a bit less, as then, even some auditors were all too busy with Y2k. But you get it – the rate of change seems to be unproportional (i.e., unmoving on the solution side) to the client expectation gap. The Client Supreme, being the general publick.
To get to the content, the advice; to Self and to others:
- Strengthen the clarity and relevance of corporate reportingto ensure the entire corporate reporting ‘ecosystem’ is as effective as possible.
- Enhance the reporting and auditing of a company’s internal controls by requiring an attestation, from directors, of the design and effectiveness of a company’s internal controls, and a corresponding attestation on internal control from the auditor for larger companies.
- Develop better engagement between the audit profession, company management, shareholders and other stakeholders, such as through a new annual assurance meeting or the introduction of an Assurance Map.
- Create a single, coherent piece of company reporting that provides more insight into the future prospects of the company—including the scenarios in which the business model could fail, giving stakeholders a clearer picture of the risks that could lead to failure so they can make informed decisions.
- Provide more insight about the material uncertainties facing a company by considering whether, market‑wide, auditors should include a key audit matter on going concern in public interest audit reports.
- Consider the need to provide assurance over other forms of risk for which stakeholders may be seeking independent assurance, potentially as part of an Assurance Map exercise.
- Reporting and assurance need to expand to cover critical performance measures that stakeholders use in their decision making, such as non‑GAAP financial performance measures.
- Provide additional assurance over the companies that need it, without expanding the statutory audit for all and potentially overburdening smaller businesses.
- Continue to develop and roll out new technologies to improve the effectiveness of audits, focusing on using technology to improve quality, efficiency and auditor insight.
- Increase investment in the training, technology and people required to conduct consistently high quality audits through a long‑term commitment by audit firms.
- Strengthen the culture of challenge in audit teams to ensure consistently effective scrutiny of companies.
- Continue to reflect on how auditors can better tackle the risk of fraud, including considering use of fraud diagnostic surveys and involvement of forensic specialists at the planning stage.
The one thing that you may have found different, is the idea of the Assurance Map. Indeed, worthwhile to consider:
The statutory audit is just one way to provide assurance over the many financial risks facing a company. A way to make sure all sources of assurance over a company’s principal risks, whether financial or not, are considered would be to make it an explicit responsibility for the audit committee to determine the level and type of assurance needed by their company’s stakeholders and to present it to them and discuss it at the beginning of the reporting cycle. Creating this Assurance Map would prompt a constructive discussion at the top of the business about the needs of their stakeholders and make it possible to get assurance over the areas that are important to those stakeholders.
Tying in with the change in risk management that we see the first blossoming of. At last! A chance to obliterate the 3LoD farce! – Or change the way you do risk management in a serious way, at last I mean. Now with audit support.
If, if. If all the above points are taken seriously. Which might mean a lot of investment of Big3½ firms in e.g., education. At the expense of fees and billable hours.
[When the rate of change you need is at the speed of brick & mortar; Raadhuis Hilversum as a prime Dudok
Guess the date (analog pic, car maufacturing dates)]