Enhancing the Auditor's Report: To What Extent is there Support for the IAASB's Proposed Changes?

45 Pages Posted: 17 Apr 2014 Last revised: 24 Apr 2014

See all articles by Roger Simnett

Roger Simnett

Deakin University; UNSW Australia Business School, School of Accounting

Anna Huggins

Queensland University of Technology - Faculty of Law

Date Written: April 17, 2014

Abstract

This article outlines proposed reforms to auditor reporting currently being considered by the International Auditing and Assurance Standards Board (IAASB), and other key national and transnational standard-setters and regulatory bodies. It adds to recent academic contributions on reforming the auditor’s report by analyzing the 165 stakeholder responses to the IAASB’s 2012 Invitation to Comment: Improving the Auditor’s Report to determine levels of support for the IAASB’s proposed reforms, and the differences, if any, between the views of various respondents based on stakeholder groups (e.g. audit and assurance firms, users, preparers, regulators, etc.) and regional classifications. Guided by insights from communication theory, our results show the levels of stakeholder support for the IAASB’s proposed reforms addressing auditors’ expectations, information and communication gaps are mixed. The strongest overall support was for enhanced auditor reporting on other information attached to, or intended to be read with, the financial statements, and the least supported initiative was including additional information in the auditor’s report about the auditor’s judgements and processes. Whilst overall there is generally consensus across both stakeholder groups and regions concerning the various questions investigated, we highlight where statistically significant differences between groups do exist. Notably, North American respondents were less likely to support a number of the IAASB’s proposed reforms than their counterparts from other regions.

Keywords: Auditor Reporting, International Auditing and Assurance Standards Board, Expectations Gap, Communication Theory, Information Gap

Suggested Citation

Simnett, Roger and Huggins, Anna, Enhancing the Auditor's Report: To What Extent is there Support for the IAASB's Proposed Changes? (April 17, 2014). Accounting Horizons, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2426104

Roger Simnett (Contact Author)

Deakin University ( email )

75 Pigdons Road
Victoria, Victoria 3216
Australia

UNSW Australia Business School, School of Accounting ( email )

Sydney, NSW 2052
Australia
+61 2 9385 5825 (Phone)
+61 2 9385 5925 (Fax)

Anna Huggins

Queensland University of Technology - Faculty of Law ( email )

Level 4 C Block Gardens Point
2 George St
Brisbane, QLD 4000
Australia

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