We have responded to Sir Donald Brydon’s Independent Review into the Quality and Effectiveness of Audit (the Review).
Accountancy Europe supports that companies and auditors provide more meaningful and transparent reporting and assurance to a wider audience, for instance on going concern issues, internal controls, non-financial reporting, etc. We embrace digitalisation, which can help improve fraud risk assessments. Communicating audit findings can be developed beyond Key Audit Matters – strong skills and expertise in multidisciplinary firms are needed to deliver on this. Such change will also require reconsidering director’s and auditor’s responsibilities and liability.
We acknowledge the expectation gap which consists of three facets: knowledge, performance and evolution gaps. A holistic and pragmatic approach to audit quality focusing on exercising professional skepticism and meeting stakeholders’ demands should respond, at least partly, to these gaps.