The current audit report format has been criticized for its lack of useful and complete…
The current audit report format has been criticized for its lack of useful and complete information. Over the past several years, investors, regulators, and auditors have debated the need for changes to the standard audit report.
a. Describe the basic information that is included in an audit report. Also discuss how that report will differ if it also contains a report on the internal controls of the company, that is, a report on an integrated audit.
b. Consider whether the current audit report requirements are sufficient to meet a user’s needs. That is, are there changes to the auditor’s report that you think would provide more useful information for the investor? In addressing this issue, review the Professional Judgment in Context feature at the beginning of the chapter and obtain a copy of PCAOB Release No. 2011-003 (June 21, 2011; available at http://pcaobus.org/Rules/Rulemaking/Docket034/ Concept_Release.pdf). This PCAOB Concept Release proposes four potential alternatives for changes to the auditor’s report. Identify those changes, select one change, and for the selected change discuss the possible merits and difficulties of the change. Use the questions posed in the Concept Release to help structure your answer.