Major changes are on the horizon for today's audit profession

TORONTO, Jan. 20, 2014 /CNW/ - The audit profession must evolve to remain relevant in today's rapidly changing global economic environment. Without significant changes, the audit profession will miss a critical opportunity to add value and offer insight to investors and stakeholders. These necessary changes, along with pressing issues facing the audit profession today are explored in the Value of Audit: shaping the future of corporate reporting, a series of candid, personal interviews with 16 of KPMG's global audit leaders.

"The expectation of audit firms has changed and we, as a profession, are changing too," said John Gordon, Canadian Managing Partner, Audit, KPMG in Canada. "We're focusing more and more on all the information that our clients and investors value."

Larry Bradley, Global Head of Audit, KPMG International, added "Auditors have broader access to a company than almost any other entity or profession. It's not just about a pass/fail report—we're in a unique position to provide investors with all of the insights needed to make the right investment decisions."

The Value of Audit explores key issues impacting audits today, including:

1. The audit model and profession
2. Audit quality and value
3. Relationships and third party perception

Each interview delves into the current reality facing the audit function and profession and asks interviewees to share their opinions on changes needed to make the audit function more valuable.

The following are a sampling of quotes from interviewees:

• "The biggest issue we face is the market's lack of understanding of what we do as auditors and how to interpret our audit opinion. Far too many people look on the audit as an insurance policy—a 'guarantee' against all things of a financial, risk, management or regulatory nature that may befall a company." Jim Liddy, Head of Audit, KPMG in the US.
• "Auditors have insights that are not getting outside the company. I can see many people saying you can't have auditors talking to investors but there must be a way of communicating with investors that might be valuable to them and would restore some trust in the audit process." Tony Cates, Head of Audit, KPMG in the UK.
• "Currently we say 'yes' or 'no' in an audit opinion. We could express our opinion on many more things if the liability regime and regulation were different. It would be good for the capital markets to have an additional statement on the robustness of the model and the risks and opportunities associated with the business model." Ingmar Rega, Head of Audit, KPMG in Germany.
• "Financial statements are like looking in the rear view mirror of a car. It can be interesting to learn about a place you're never going to see again. But it's not so relevant to where you are going." John Gordon, Head of Audit, KPMG in Canada.

KPMG welcomes the recent proposals from the International Auditing and Assurance Standards Board (IAASB) to expand the auditor's report to give increased information on the matters the auditor determined to be of most significance in the audit.

The IAASB's proposals are an important first step towards better meeting the needs of users who want more insight into the audit that was performed than is possible under the current reporting model.

LEARN MORE

Larry Bradley's Interview - on changes needed to the audit profession

Value of Audit website - all full interviews

@KPMG_Canada - #valueofaudit

KPMG on LinkedIn

KPMG website

About KPMG

KPMG LLP, an Audit, Tax and Advisory firm (kpmg.ca) and a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm of KPMG International Cooperative ("KPMG International"). KPMG member firms around the world have 155,000 professionals, in 155 countries.

The independent member firms of the KPMG network are affiliated with KPMG International, a Swiss entity. Each KPMG firm is a legally distinct and separate entity, and describes itself as such.

SOURCE: KPMG LLP

For further information:

Kira Froese
National Advisor, Communications
KPMG in Canada
[email protected]
416 777 8928

Julie Bellissimo
National Manager, Communications
KPMG in Canada
[email protected]
416 777 3988