PwC opens up discussions on future of audit

PwC has announced a programme of actions designed to encourage wider discussion on how auditing needs to evolve for the future, which includes a series of roundtable sessions around the country, culminating in a London event early next year

The discussions kick off in Birmingham on 14 December 2018 and will also be held in in cities such as Belfast, Edinburgh and Manchester. The firm says as well as inviting a wide range of stakeholders and experts to take part, it is encouraging people to contribute to the discussion by submitting comments via an online portal.

In a letter sent to 7,000 clients and investors Kevin Ellis, PwC chairman and senior partner, said the auditing profession is under great scrutiny and has become a subject of much debate and commentary in the public arena as it reaches ‘a watershed moment’.

‘Whilst audits perform a critical role in underpinning confidence in financial reporting and are valued by many stakeholders, it’s evident that the audit has not kept pace with society’s expectations.

‘Those of us in the audit profession must acknowledge that our current critics have raised valid concerns.

‘More stakeholders than ever depend on the accuracy of financial reporting; shareholders rely on a far wider set of performance information than is included in the “back half” of a set of accounts; and there’s rising demand for auditors to give a more forward-looking assessment of an organisation’s health, whether in the public, private or the third sector. None of these areas are tackled in today’s audit model,’ Ellis said.

PwC said it acknowledges there are already a number of reviews looking at structural elements of the audit market and examining questions around choice, independence and quality.  The aim of its initiatives is to work with companies and other stakeholders to suggest practical solutions regarding the changing role of audit to meet changing needs and expectations of business and society.

The firm has suggested five broad questions to act as a framework to open up discussion on the issues involved.  These are:

•         Who should the audit be for?

•         What should the audit cover?        

•         Should the focus continue to be on a binary ‘true and fair view’?   

•         Does one size of statutory audit fit all organisations?

•         How will technology enhance the future of the audit?

PwC says it aim to bring together the themes and views that emerge as a result of the discussion at an event in London on 11 February 2019, and make them openly available through a white paper.

More information on PwC’s discussions around audit is here

Report by Pat Sweet

 

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