Auditors, organizations and investors all have important roles to play in working to maintain the flow of capital that underpins the capital markets.
The traditional audit provides assurance over the truth and fairness of historical financial information. While that has served markets well in the past, is it a sufficient approach to address changing market needs at a time when trust in businesses and corporate reporting is declining?
Stakeholders do not fully understand each other’s roles – in particular, investors do not fully understand how an audit is conducted, and management and audit committees may need clarity on the information investors need to make investment decisions.
Auditors are valued by stakeholders because they offer an objective and independent point of view, but their remit may need to be expanded to encompass a wider set of information to remain relevant.
In an increasingly digital world, the public and users of audited information already expect the audit profession to be using new technologies to execute better audits – analyzing more data, spotting more risks or discrepancies, and identifying new correlations. Stakeholders will need to develop better skills in areas supporting innovation.