The assessment of the financial crisis in so far as corporate failures and the value of an audit are concerned, resulted in regulators and investors recognising that auditors have significant insight into the audited entity. However, the Auditor’s Report is written in standardised boiler-plate language which does not provide any of that insight into this auditor knowledge of the entity other than a binary
pass/fail opinion. 

The IAASB’s project was therefore specifically scoped to enhance auditor reporting within the existing scope of the audit – thus the auditor’s work effort will not be expanded. It was merely an attempt to report on work that already performed by auditors, thus enhancing the communicative value of the Auditor’s Report.

In this Alert, Nkonki brings to your attention information on the New Auditor’s Report, which is effective for audits of financial statements for periods ending on or after 15 December 2016. This will bring about significant changes, particularly given that the Auditor’s Report of listed entities will need to include a section on Key Audit Matters (KAM). 

Nkonki summarises the key changes and the benefits envisioned by the New Auditor’s Report to provide you more insight as an Audit Committee member

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Alert 5: New Auditor's Report