European and international revised requirements on auditor communication are compatible
Incompatibility between the EU audit reform and the parallel review of the international standards on auditor communication could have harmed transparency and trust across capital markets. FEE worked hard to prevent that and today’s analysis confirmed its success.
The way in which an auditor communicates with stakeholders is a heavily regulated topic. Recently, both the EU legislator and the international auditing standard setter (the IAASB) have taken steps to improve the communicative value of the auditor’s report. FEE has assessed if these updated European and international requirements are compatible. In this new briefing paper, we demonstrate that, in most cases, the EU and IAASB provisions on auditor communication are equivalent or complementary. This means that an audit report prepared under the new EU law, also complies with the standards set by the IAASB.
This FEE briefing paper on auditor communication covers not only the audit report and the report to the audit committee, but also the transparency report and the report to supervisors. On top of the comparison of auditor communication requirements, it provides a helpful overview of how EU law has changed in that regard.
This publication is the fourth in a series of briefing papers that FEE has done to enhance stakeholders’ understanding of the EU reform. Please also see our papers on public oversight, provision of non-audit services and appointment of auditors.