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Closing the expectation gap
23 November 2018
Auditors beware – a new poll from ACCA shows 48% of the UK public believe it is auditors who are responsible for avoiding company failures. The same poll discovered that 41% of these same people expect auditors to always detect and report any fraud.
The current state of audit was also questioned, with 65% of those surveyed agreeing that audit needs to evolve to prevent company failures.
The problem is only a quarter of respondents were able to accurately identify what an auditor does – give an opinion on whether the financial statements of a company give a true and fair view and do not include material misstatements due to fraud or error.
This all comes as Sir John Kingman is reviewing both the role and remit of the regulator, the FRC. The Competition and Markets Authority (CMA) is also probing the audit sector, and on 12 November the Business, Energy and Industrial Strategy Select Committee also announced an inquiry into the future of audit.
ACCA’s Andrew Gambier said the profession has long talked of the expectation gap in audit, and this research shows it has failed to close this gap. The ACCA wants to see a two-year cooling off period for auditors, following the end of an audit before any further form of consulting service is undertaken.
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