logo

Major Changes in the Audit Report

   

Added on  2020-04-07

6 Pages1366 Words66 Views
AUDITORS REPORT
Major Changes in the Audit Report_1
Auditor reportMajor changes in the audit report with due concentration on both similarities and differences betwixt the IAASB and PCAOB auditing standardsAfter the emergence of GFC (Global Financial Crisis), the requirement of enhancement in the quality of audit report has become very important. The reason behind this can be attributed to thefact that provision of enhanced details in the audit report can facilitate better understanding on the part of users and therefore, various changes have been made in the audit report.The first change that has been made in the audit report is that a new segment has been framed so that KAM (Key Audit Matters) can be disclosed to the users. Furthermore, both PCAOB and IAASB standards exert within their respective framework that KAM must be disclosed in the audit report (Whitehouse, 2017). However, PCAOB generally provides examples wherein disclosure of the same might be more appropriate, while the IAASB does not provide details on such examples. In addition to the same, it can also be observed that both standards exert that at least one key audit matter must be incorporated in the auditor’s report and if there is no such matter, then the auditor must take steps to reflect the same in the report through a statement (PCAOB, 2016). The second key change in the auditor report is that the auditors’ opinion segment must be reflected first and after that, it must be followed by the basis for such segment (Whitehouse, 2017). Moreover, after comparing both IAASB and PCAOB standard, it can be seen that the ordering of such segments under these standards is similar. The third material change in the audit report is that the auditors must endeavor to disclose the name of their respective engagement partners so that relevant information can be offered to the users (PCAOB,2016). However, in association with the IAASB and PCAOB standard, it can be seen that both these standards necessitate disclosure of the name of auditor’s engagement partner but the way ofproviding the same is not similar in both these standards. The next change in the audit report is that the auditors are now under a non-delegable responsibility to disclose about their steps taken to fulfill the moral duties. However, even though the provisions relating to this change is almost similar in both the standards, the key contrast between them is that on one hand, the IAASB requires that the auditor should make an affirmative statement relating to the same through a separate segment while on the other hand, the PCAOB does not necessitate the same. The next key change in the report is that it has now become compulsory for the auditors to reflect a separate segment that can assist in providing details regarding the material uncertainties in the 2
Major Changes in the Audit Report_2
Auditor reportcompany’ financial statements (Matthew, 2015). Further, it has also become important to addressthe effectiveness of disclosures in association with narrow escapes when identification of events are facilitated that can question the company’s capability to continue as a going concern concept.Nonetheless, the principles of catering such matters in both the given standards are equivalent in nature. However, under the PCAOB standard, if such going concern issues are also determined as critical audit matter, the same disclosure can be made in the segment of CAM and descriptive paragraphs. Besides, the IAASB standard helps in the specific management disclosure and responsibilities of the auditor in association with going concern (Tepalagul & Lin, 2015).3
Major Changes in the Audit Report_3

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
ACCG925 Auditing & Assurance Services | Report
|5
|1190
|54

Auditing and Assurance Services : Assignment
|8
|2022
|87

ACCG925 – Auditing Assignment
|9
|1237
|277

Auditing and Assurance Services - Assignment
|7
|1162
|147

Auditing Slandered Adopted by PCAOB - Assignment
|4
|1256
|38

Assignment On New Standards on Audit Reporting
|8
|1612
|164