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Key Observations from CAQ's Roundtable Series on the Role of the Auditor

From May to June of last year, the Center for Audit Quality sponsored a series of roundtable discussions to explore how the auditor's role might change and evolve to improve financial reporting beyond the boundaries of the financial statements and internal control over financial reporting.  The Center recently released a summary of the key observations made during these sessions attended by investors, CEOs/CFOs, auditors, academics, attorneys, former regulators and other interested parties.  The observations are arranged by those that apply mainly to the corporate reporting framework (preparers, audit committees and regulators/standard setters) and those that apply mainly to the external auditor's role in the reporting process.  A few of the key observations made were:

  • Participants agreed that annual reports are in a state of "disclosure overload" resulting from the expanding complexity of GAAP, as well as compliance and liability concerns on the part of preparers and counsel.
  • Participants generally did not believe that audit committees should share the content of the auditor's written/oral communications with investors because investors would not have the appropriate context derived through conversations between the auditors and the audit committee.
  • Participants believe that the auditor's role should be limited to attesting to information provided by management and that auditors should not provide their own "impressions" or views regarding the quality of a company's accounting policies and practices.

Additional information about these key observations and others can be found here.