In December 2019, Sir Donald Brydon issued his report into the auditing profession. The objective of the Brydon review was to understand what could be done to bridge the 'expectation gap'. The 'expectation gap' is the difference between what an auditor does and what the general public think the auditor does.
The Brydon reviews makes 64 recommendations – including having a separate auditing profession. Whether this will, or will not, come to fruition only time will tell. Auditors are often in the 'firing line' when it comes to large-scale corporate collapses but is this right? Should auditors be held to account if a company is run by unscrupulous directors? Auditors already must apply professional scepticism when carrying out audit work, but is this enough?
Currently auditors are not responsible for preventing and detecting fraud, but the report recommends that auditors must state in their auditor's report how they have assured the directors' statement on material fraud and what additional steps have been taken to assess the effectiveness of controls and to detect any such fraud. In addition, the report also recommends that auditors undergo initial and periodic training in forensic accounting and fraud awareness. So, in all, there are some wide-reaching recommendations that could significantly change the shape of the auditing profession as we currently know it.
Auditors are frequently criticised by regulators and professional bodies for deficiencies in their audit work – particularly at the completion phase. Among other audit-related issues, The Audit Process course examines these key areas in detail highlighting what procedures the auditors must carry out in order to discharge their responsibilities under the International Standards on Auditing properly.
Steve Collings is an author for accountingcpd. To see his courses, click here.