The Financial Reporting Council (FRC) is consulting on improvements to auditors' reports in response to criticisms that the current model is uninformative.

The proposals, outlined in Consultation Paper: Revision to ISA (UK and Ireland) 700, require the auditor's report to describe the risks of material misstatement that were identified and assessed by the auditor and which had the greatest effect on the audit strategy.

The FRC also wants to see an explanation in the report of how the auditor applied the concept of materiality, together with a summary of the audit scope. It says this summary should detail how the scope responded to the issues around materiality.

Nick Land, chairman of the FRC's Audit and Assurance Council described the proposals as 'a step change from the traditional binary pass/fail model of audit report'.

'The proposals in this Consultation Paper "close the circle" by requiring the auditor to disclose information about the audit, within the auditor's report itself. Information about the audit is seen as more within the domain of the auditor than of the board.' Land said.

The FRC says it hopes the findings from its consultation will influence other professional bodies seeking to enhance the communicative value of the auditor's report; such as The European Union and the International Auditing and Assurance Standards Board (IAASB).

The consultation period ends on 30 April 2013 and the FRC will be holding a public meeting to discuss the proposals on the morning of Thursday 28 March in London.