Old hands and new tricks
An extended audit report can tell a compelling story while demonstrating and showcasing the value of your audits, say Jayne Kerr and Phil Lenton.
Over the next year, implementation of the auditing standards recently revised by the Financial Reporting Council (FRC) will bring changes in the content and structure of extended audit reports and a significant expansion in their use, as outlined in Standard issue, in the October edition of Audit & Beyond.
While some firms will be issuing extended audit reports for the first time, other firms are already old hands at it and are entering the fourth year of issuing them. Our experiences have taught us about the benefits and the challenges involved and we want to share them, not only with those issuing extended audit reports for the first time, but also with other old hands, so that we can all continue improving and innovating them.
It hasn’t all been plain sailing. In the first year, when everything was new, there was limited guidance in the original UK auditing standard and the auditors were sometimes quite cautious. But as the years have progressed, we have seen the many benefits of this extended (or as it is sometimes called, enhanced) reporting, our reports have evolved and significantly improved – and some are now award-winning.
Nonetheless, we continue to face a number of serious challenges, some not dissimilar to those faced by the companies we are reporting on. ICAEW will shortly be publishing a guide on how to make these disclosures more interesting, insightful, useful and fresh each year.
Meanwhile, this article outlines 12 useful tips to help auditors make the most of extended audit reports and to give them the opportunity to communicate with shareholders and tell the story of the audit.
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