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Clear, transparent reporting

The new auditor’s report

Auditor’s reports have up until now been a standard pass/fail report with limited, if any, information that relates specifically to the entity, while providing no indication of the complexities relating to the entity or the audit. The auditor’s reports are about to be revolutionised with the release of the International Auditing and Assurance Standards Board’s new and amended International Standards on Auditing, which will transform the auditor’s report, and for listed entities, will include key information relating to the audit of the entity.

However, the auditor’s report, being the key deliverable addressing the output of the audit process, has up until now been a standard pass/fail report with limited, if any, information that relates specifically to the entity, while providing no indication of the complexities relating to the entity or the audit.

Since auditing is a profession that goes about its work behind the scenes, investors and other financial statements users have demanded more transparency and insight into the audit.

The auditor’s reports are about to be revolutionised. The International Auditing and Assurance Standards Board (IAASB) has, after a five-year project, released new and amended International Standards on Auditing (ISAs) which will transform the auditor’s report, and for listed entities, will include key information relating to the audit of the entity.

The IAASB intends for the new and revised auditor reporting standards to result in an auditor’s report that increases the transparency of and confidence in the audit and the financial statements, which is in the public interest. Ultimately, the IAASB believes that the transformation of the auditor’s report is critical to the perceived value of the financial statement audit and to the continued relevance of the auditing profession.

The IAASB’s amended standards are effective for years ending on or after 15 December 2016.

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