Reform reviews, both in the EU and globally, are currently proposing radical changes of the wider financial reporting ecosystem. These reforms relate to the three main pillars – namely audit, corporate governance and the supervision and enforcement of these (as identified by the European Commission in the EU) – contributing to high-quality and reliable corporate reporting.
Unsurprisingly, the auditing profession is at the heart of these reforms, with proposals expected to reshape it fundamentally. At the same time, and while these reforms mainly focus on public interest entity (PIE) audits and PIE auditors, major developments are taking place in the global audit and assurance standard-setting arena with audits of less complex entities (LCEs) being in the frontline.
This report provides a brief summary of some of the key recent developments by reference to the Business Energy and Industrial Strategy (BEIS) consultation white paper Restoring Trust in Audit and Corporate Governance: Proposals on Reforms in the UK (BEIS 2021), the European Commission’s consultation paper Strengthening of the Quality of Corporate Reporting and Enforcement in the EU (EC 2021) and the newly developed proposed International Standard on Auditing (ISA) for Less Complex Entities issued by the International Auditing and Assurance Standards Board (IAASB) (IAASB 2021), aiming to raise awareness of their implications for the audit profession.
In addition, the report refers to the relevant skills expected of the future auditor in light of the proposals set out in the above-mentioned reform reviews.
This report is intended primarily to guide and inform audit practitioners, and professional accountants more widely, to:
- keep them abreast of the changes and enable them to understand what these changes mean for the auditor of today
- keep them up to date to support audited entities better
- enable them to understand the implications for new skills, learning and development for the auditor of the future, arising from these changes.
