Benchmarking the new auditor’s report
Key audit matters and other additional information
Released six months after the end of the 2016 calendar year, this publication is the first comprehensive analysis of the new auditor’s report with a main focus on the new key audit matters. It analyses the recently published new auditor’s reports for companies in Switzerland listed at the SMI (“Swiss Market Index”) or SPI (“Swiss Performance Index”).
What has changed?
The annual reports of companies listed on a stock exchange in Switzerland include the auditor’s opinion on the consolidated financial statements and the standalone financial statements of the holding company. The audit report on consolidated financial statements prepared in accordance with IFRS, Swiss GAAP FER or US GAAP has now changed for listed companies.
After a five year project led by the International Auditing and Assurance Standards Board (IAASB), followed by a transition period, auditors of listed entities need ed to apply the revised International Standard on Auditing (ISA) 700 and the new ISA 701 for the first time in their audits of financial statements for periods ended December 2016.
This change comes from a demand by investors and users of financial statements for more insights and transparency into the audit. The revision of ISA 700 has also led to a new structure of the audit opinion. With the new structure, the auditor’s report begins directly with the “opinion” and the identification of the document that has been audited. Investors and users of financial statements benefit from an increased understandability of the auditor’s report.
For listed companies, the new auditor’s report discloses the matters that were of most significance in the audit. The new ISA 701 defines them as “key audit matters”. With this information the auditor's report has been transformed from a standard pass/fail report into a more meaningful and customised report and represents a move towards more clarity and t ransparency .
What are the key findings ?
- Audit firms in Switzerland apply the new auditing standards in different ways.
- Audit firms support innovation and are willing to provide investors and other stakeholders with greater transparency into the audit as well as insights.
Download the publication to get more insights.