Improving communication between stakeholders
As auditors, we glean huge amounts of information and insight into a company, and the risks it faces, during our work – but only a limited amount of that is communicated to the outside world. A lot of it stays inside the organisation and in discussions with audit committees which range across a whole raft of key issues such as internal controls, risk management and IT systems. We have heard from investors and they clearly want more – more information that provides insight rather than just describes. They want to know how companies have handled risks and mitigated them. In our roundtable discussions with investors, many would like to see non-GAAP financial measures (supplemental information) clearly reported and that there is consistency over time. Better communication might also help to potentially combat investor short-termism and encourage a longer term view. Audit committees, for their part, have indicated an interest in more feedback from investors on the information they provide and whether it is actually helpful to investors. Working together to improve communication will bring a new level of transparency, and may play an important role in restoring trust in business.