The audit profession must evolve if it is to remain relevant and continue to offer insight to investors and stakeholders according to KPMG which has published a series of interviews with its audit leaders around the world in a bid to encourage greater debate on the key issues to be addressed.
Larry Bradley, KPMG global head of audit, said that while auditors have traditionally focused on providing a historical set of statutory financial statements, it is becoming clear that stakeholders are increasingly basing their decisions on information that resides outside of those statutory accounts.
John Gordon, head of audit, KPMG in Canada, said: '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.'
KPMG looks at what this trend means for the profession in Value of Audit: shaping the future of corporate reporting which identifies three key issues: the audit model and profession; audit quality and value; and relationships and third party perception. The work includes interviews with 16 of KPMG's audit leaders from around the world examining the current challenges facing the audit function and profession and offering opinions on the changes needed to help make the audit process more valuable.
Tony Cates, head of audit at KPMG in the UK, said: '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.'
Amongst the views expressed by KPMG's audit experts are the need to improve users' understanding of how audit functions and how to interpret audit opinion; the need to make greater use of data analytics technology; and the desire to provide greater insight into a company's management controls and business strategy.
The firm says it is encouraging auditors, investors and other stakeholders to join the discussion on the Value of Audit by following KPMG on social media include Twitter @kpmg #valueofaudit and LinkedIn.
