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Under the microscope

What do reports from the world’s audit regulators say about the auditors they regulate? Katharine Bagshaw looks beyond the obvious.

Appearances can be deceptive. Glance casually at the public reports issued by audit regulators across the world and you might be forgiven for thinking that they all say the same thing. That while cultural differences are important, auditors in all jurisdictions have much the same problems, and that audit regulators are all looking to each other for interesting and innovative ideas about how to present those problems, and the regulatory solutions to them.

At a superficial level this may be true. However, when you look more closely at the public reports recently issued by audit regulators in various jurisdictions across Europe, Asia and North America, and reports issued by the International Forum of Independent Audit Regulators (IFIAR; i3iar.org), and the European Audit Inspection Group (EAIG; eaiCweb.org), some of the differences start to emerge.

Dealing with differences

Variations in tone and approach may arise from cultural differences, and the status of auditors and regulators in a particular society for example, but there are also differences in regulatory 'reach'. For example, some audit regulators, such as the Financial Reporting Council (FRC) in the UK and several in Asia, also regulate or oversee company reporting, but the Public Company Accounting Oversight Board (PCAOB) in the US does not, despite its name.

This is an extract from an article in the May 2015 edition of Audit & Beyond, the magazine of the Audit and Assurance Faculty.

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