GENERAL NEWS c o n t .
IRBA's attempts to assist them in getting their house in order,
almost inevitably improve quality in the firm and can be relied
on to discharge their responsibility to all stakeholders. Those
auditors who blame everyone else for poor audit quality have
no one but themselves to blame for the perceived demise of
the profession.”
“While the IRBAhas responded to the many challenges facing
auditors by creating an environment to work together with the
profession to uphold high-quality audits, auditors need to
share this responsibility by responding to the issues raised by
the regulator,” saidAgulhas.
“The logic is simple – those auditors who respond to the
reclaim its standing. Daboo was speaking at an informal
roundtable discussion held at the IRBAearly in September. He
is a recipient of the 2014 BritishAccountancyAwards accolade
for Outstanding Industry Contribution in recognition “for
breaking new ground in audit by publishing details of his
findings during the audit in some of his audit reports – a move
which goes beyond minimum regulatory requirements”,
according a KPMG statement at the time.
The new and revised standard requires auditors of listed
companies to include key audit matters (KAMs) in their
reports. Daboo said at his firm they go beyond just giving a
description of a risk, they put a stress on being specific about
why a certain risk would be critical to a company for that
particular year.
One of the reported consequences, particularly in the UK, with
the changes has been that some investment houses are now
analysing the KAMs to gauge how these might affect the value
of the investments.
Lessons from the UK -Auditor Reporting
Some of the recent global financial scandals that have, in
certain cases, directly contributed to the global economic
meltdown have been a result of shoddy auditing practices. To
remedy the situation, there have been various attempts to try
to remodel regulatory practices in the financial sector. One of
these moves has been the introduction of a new and revised
auditor's reporting standard aimed at adding more value for
investors and general users of auditing and financial reports.
The new standard, ISA 701, was introduced by the
International Auditing & Assurance Standards Board to
enhance auditor responsibilities by adding more
communicative value and transparency to audit reports. South
Africa is still gearing up for its application, while in the UK the
standard has been applied since the September 2013 year-
end.
Prior to its adoption, the UK auditing landscape had gone
through a troubled period, according to Jimmy Daboo, audit
partner at KPMG in the UK. However, with the introduction of
the revisions an opportunity now exists for the sector to
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Issue 31 July - September 2015
