Too much information may blunt the report as a communication tool, actually contributing to the expectation gap, and a shorter report with cross references to information on the internet may work better. Their summary letter and full submission suggest that the proposed report is too long and prone to boilerplate commentary which is counter to the current thrust of reducing the clutter. The inclusion of commentary on areas of sensitivity contributes to the excessive length and detracts from more clearly identifying those areas where the auditor disagrees with information in the financial statements.
The IAASB should not address this topic alone but should work with the IASB to arrive at a practical conclusion to the presentation of clear uncluttered information in a financial reporting framework that includes the positioning and content of the auditor’s report and the determination of what information should be included in that report as opposed to the financial statements. We recommend that this joint working party should address not only format but how best to deal with the many judgments in financial statements in the financial report as a whole. These proposals are in danger of overlaying another layer of disclosure without making the financial report as a whole any more meaningful.
Furthermore, in our experience auditors are often ill placed to make assessments of either solvency or its related concept of “going concern”. In our view consideration of an auditor’s role in opining on solvency/going concern should be accompanied by a discussion of the communications that auditors should obtain from client’s bankers and the nature of solvency.
The Accounting Professional and Ethical Standards Board (APESB) is presently seeking feedback on proposed revisions to APES 215 Forensic Accounting Services:
"Generally we support the amendments proposed in the exposure draft. The two new Appendices are helpful in determining the nature of different forensic accounting services. However, we make the following comments.
Generally in the APES literature, there seems to be a lack of clarity as to whether Members (as defined) are made up entirely of Members in Practice and Members in Business, or whether there is a third category of Members who are not in business, but nor are they in practice, as defined, but are still bound by the standards."
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Chris spent three days in the Federal Court in Melbourne in May.
In the recently concluded Centro matter, Chris acted as the expert audit and accounting witness for PwC. The size and complexity of this matter put the process of expert conclaves and hot tubs into an entirely new frame. Five experts, multiple pleadings, and the sometimes surprising informality of the process challenged experts and counsel alike.
And yet in Chris’ view the process seemed to work.
Once the expert conclave found its modus operandi, it succeeded in providing an effective synthesis of the views of the experts distilling their multi-faceted reports into a usable matrix that highlighted points of similarity and difference.Whilst the “hot tub” provided counsel with complex procedural issues in handling cross examination, it enabled a concise articulation of the experts’ views on the topics the court saw as material to the case in 3 days - a much more efficient process than traditional serial cross examinations.
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Chris and Stephanie act as consultants and experts (“clean” and “dirty” experts) in the context of dispute resolution on a variety of financial reporting and audit issues.
Westworth Kemp Consultants can provide support to businesses, professional practices and regulators seeking to implement systems designed to foster compliance
Independent advice on the interpretation of auditing (or assurance) and accounting (or financial reporting) standards can be hard to find.