Nexia urges stakeholder education on role of auditors
Nexia International renewed calls for stakeholder education on the role of auditors in the wake of the global financial crisis at its annual conference in Paris.
The accounting network’s Annual Audit Forum debated the role of auditors in the current economic environment. It also considered opportunities to reinforce the importance and relevance of financial reporting to stakeholders beyond company management teams and audit committees.
Professor Arnold Schilder, chairman of the International Auditing and Assurance Standards Board (IAASB), a guest speaker at Nexia International’s annual audit forum, reinforced this view: “The auditingprofession shouldn’t have modest ambitions about its role in the modern business world. It should recognise the need to communicate the value it adds to stakeholders”.
“Stakeholders are generally interested and informed, but the profession needs to do more to engage with them – especially if they’re external stakeholders without access to the company’s long-form report,” he said.
Professor Schilder outlined a number of IAASB initiatives aimed at understanding the needs of client companies and at strengthening existing assurance standards and introducing new standards where appropriate, with the overall objectives of:
Supporting global financial stability;
Enhancing the role, relevance and quality of assurance and related services in an evolving world; and
Facilitating the adoption and implementation of those standards.
Professor Schilder stressed the need to ensure that audit statements are clear and easy to understand, and the importance of a “global auditing language”. “There is a strong call that auditors should be communicating what they do, why they do it and the relevance of financial reporting, not just in relation to the company they’re auditing but the wider world,” he said.
Professor Schilderwelcomed Nexia International’s recently announced full membership into the Forum of Firms as a “very important step” in the network’s ability to contribute to the development of international auditing standards.
Felix Lozano, chairman of Nexia’s International Audit Committee, said: “As well as greater transparency, we need the role of the auditor to be acknowledged and understood by all stakeholders in global capital markets.”
“There are opportunities to enhance the quality of audits globally, but only if the future direction of the audit profession is based on a framework for audit delivery that is easily understood professionally and financially, taking into account both risk and reward.”