The Canadian Public Accountability Board (CPAB) has releases a summary of the key messages that came out of its audit quality symposium revealing expectations gap between stakeholders and the importance of information disclosed outside of the financial statements.
In a short report summarising the discussions, the CPAB outlined the three key messages that came out of the two day event:
“1. Investors use a wide variety of financial and non-financial information to assess a company’s performance, financial condition and future prospects; very little of which comes from the annual audited financial statements. The belief by key stakeholders that all information disclosed by reporting issuers is equally reliable represents an expectations gap that creates a risk to the capital markets.
2. Auditors and audit committees have an opportunity to engage increasingly with information outside the financial statements to enhance its reliability and reduce the expectations gap.
3. Transformational change is required to ensure there is continued confidence in the information that drives the capital markets and the audit remains relevant. A fundamental transformation will only be successful if all parties in the financial reporting and disclosure system are engaged, support this transformation and reassess their respective roles and responsibilities.”
The CPAB’s audit quality symposium was held in May of this year and the final summary of the findings published earlier this summer.