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Audit Insights

Audit is a public interest activity. Audit reports build confidence in financial statements, and give credibility to companies, and comfort to their stakeholders. Companies also benefit from the insight that auditors have into business processes and the wider market environment.

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Audit Insights is an opportunity for auditors to bring their knowledge of a market sector to the public, capturing more of the audit value for the public interest. Shared insight and observations have been brought together, in an environment that protects client confidentiality, to produce these reports.

Audit Insights: Construction

The sixth report in the Audit Insights series focuses on the construction sector. It is based on the collective insights of a group of external audit experts, mainly from large and medium-sized audit firms with many years’ combined experience of auditing companies in the construction sector. Representatives from Baker Tilly, BDO, Deloitte, EY, Grant Thornton, KPMG, Mazars, PwC and the Orange Partnership formed the working group.

Construction has been hard hit by the economic downturn in recent years and its effects are still being felt. But the sector is recovering and confidence is improving. There are increased levels of employment, a huge need for infrastructure and a ‘wall of money’ potentially available to invest. But with these big opportunities comes responsibility. It is not a time for complacency and politicians, construction businesses and sector representatives all have a role to play in addressing the challenges the sector continues to face. The report identifies five areas in the current landscape that auditors think are of most interest and relevance to construction businesses, investors, policy-makers and other construction stakeholders.

Audit Insights: Retail 2014

Audit Insights: Retail 2014 has been drafted by a group of audit experts from the six largest audit firms based on their many years’ combined experience auditing retail businesses across the UK and internationally, and based on their current involvement in planning and delivering audits in the sector. Their sketch of the sector landscape is based on the flags carefully chosen in the first Audit Insights:Retail, published in January 2013, which mark out the most immediate areas of interest.

This report seeks to explore issues that may not have reached an audience outside the retail sector, and to bring forward the trends and issues that interest auditors and affect every retail stakeholder.

Audit Insights: Cyber Security

The importance of cyber security has grown in recent years as reliance on information technology and the internet has increased. Cyber security issues affect businesses of all sizes and across all sectors. Managing cyber-based risks to individual businesses, as well as the wider economy, also requires many different stakeholders to work together.

Audit Insights: Cyber Security, the fourth in the Audit Insights series, aims to support informed public debate in this area and help businesses to understand the changing nature of the threats that they face. It is the work of a group of external audit experts from large and medium-sized audit firms with many years’ combined experience of auditing companies. Representatives of the following firms formed the working group of external audit experts: BDO , Deloitte, EY, Grant Thornton, KPMG and PwC.

This report highlights four areas that external auditors believe are of most interest and relevance to senior management, non-executive directors, investors, policy-makers and other stakeholders.

Audit Insights: Banking

Our report Audit Insights: Banking is the third in ICAEW’s Audit Insights series and follows reports on retail and manufacturing. It is based on the collective insights of banking audit specialists from BDO, Deloitte, EY, Grant Thornton, KPMG, Mazars, the National Audit Office and PwC.

Since the start of the credit crunch in 2007 and through the global financial crisis that ensued banks have made changes to their businesses, improved the information they publish and strengthened governance and internal control. There have also been major reforms to how banks are regulated. All this has made banks safer but has also added to their costs of doing business. Bank customers may need to pay more for a narrower range of banking products and services.

Our report highlights long-term business challenges that banks still face, set out as four flags. These relate to: cultural change; the potential need to rethink their business models; challenges in measures used to assess their financial strength and performance; and demands for major IT investment.

Responsibility rests primarily with bank boards and there are no quick or easy fixes.

Audit Insights: Manufacturing

The second report in our Audit Insights series focuses on the manufacturing sector. It has been drafted by a group of audit experts from the larger audit firms based on their many years’ combined experience working with manufacturing clients across the UK and internationally, and based on their current involvement in planning and delivering audits in the sector. Their sketch of the sector landscape is highlighted by carefully chosen flags, marking out the most immediate areas of interest. With so much focus on a perceived need to rebalance the UK’s economy away from financial services and towards manufacturing, this report could also provide policy makers with a helpful steer on the major challenges and opportunities for the sector.

This report seeks to explore issues that may not have reached an audience outside the manufacturing sector, and to bring forward the trends and issues that interest the auditors and affect every manufacturing stakeholder.

Audit Insights: Retail 2013

Audit Insights: retail has been drafted by a group of audit experts from the six largest audit firms based on their many years’ combined experience working with retail clients across the UK and internationally, and based on their current involvement in planning and delivering audits in the sector. Their sketch of the sector landscape is highlighted by carefully chosen flags, marking out the most immediate areas of interest.

This report seeks to explore issues that may not have reached an audience outside the retail sector, and to bring forward the trends and issues that interest the auditors and affect every retail stakeholder.

Inspiration: Program Sharing Knowledge

In 2010 the Nederlandse Beroepsorganisatie van Accountants (NBA) started Program Sharing Knowledge, designed to identify and capture information on structural risks across entire sectors by making use of auditors’ expertise. A key element in this programme was the creation of public management letters, reports drawing on the work and insights of auditors to identify risks, addressed to all the stakeholders in a given sector.

Inspired by the success of Program Sharing Knowledge, the Audit and Assurance Faculty have developed Audit Insights and our own Sector Report process to harness the expertise of auditors in the UK.