Changes in audit report models 2
CHANGES IN AUDIT REPORT MODELS
The changes in the audit reporting models have come with major benefits. Informational value has been increased. The auditor is required to clarify further to the users of the audit report. The value of the report and its related risks is made to the user. The reader of the report is given the necessary information that will enable them make informed decisions. In case the user of the audited information wanted relevant information this is now made available. The American auditors will be tasked to make their report relevant to them. The auditors have been further tasked to make availed extra information related to the audited financial report to the user. The main aim of the changes in the audit report statement was to bring more use to the users (United States, 2011 p 34).
Matters related to the audit report would be communicated out. The shareholders have since been left to struggle in making sense of the report given to them by auditors. The information has always dealt on the financial statements leaving out other related factors that affect decision making. Making such matters part of the audit report really benefits the user. They comfortably make decisions with no doubts and less risk associated. Users might have not known something else, thus clarifying these matters makes the user more informed about the report. In addition, full knowledge of a report gives the user easier time dealing with the related firm from where the report came.
Auditor’s language on their responsibilities simplified for the user to clearly understand it. Shareholders and other users of the audited information will now be confident making business decisions since they will be basing their decisions on well-known auditors working in with reputable firms. Touching on their tenure, independence and responsibilities, the auditor will further mention to the users the extent of their responsibilities relating to the information given out. The auditor will mention the extent of their responsibility on the use of their information gathered from other business related information. Auditor’s relationship with the company will be revealed to the users and shareholders. The length of time serving with the company as an auditor gives an upper hand to the user. This kind of relationship gives a hint of what kind of person is the auditor being to them. Without much detailed information about the auditor, such is enough proof for the users to know what information they are getting. The credibility of the information auditor will be giving and history of the work done by the said auditor (Talbot, 2010 p.65).
More statements in the report that are meant to clarify on the auditor and the audit report. These include auditor’s independence and the extent of their tenure. The added report will add more strength on the audit report as the user will base their judgment on the report bearing in mind the name of the auditor. This greatly give them confidence in their business deals.
The auditor will be responsible in ensuring their report gives clear information, definitions of terms and guidance to the user. This will ensure the user of the report gains enough knowledge as far as interpreting the audited report is concerned. Auditor’s emphasis and clarification on the report be made in summary for the user to get a clear map of the whole report. Auditor’s evaluation outside the report will be an added factor in the new features of the report. The user will get to be informed of other things that affect the business.
UNITED STATES. (2011). The role of the accounting profession in preventing another financial crisis: hearing before the Subcommittee on Securities, Insurance, and Investment of the Committee on Banking, Housing, and Urban Affairs, United States Senate, One Hundred Twelfth Congress, first session, on examining the role of the accounting profession in preventing another financial crisis, April 6, 2011. Washington, U.S. G.P.O.
TALBOT, C. (2010). Theories of performance: organizational and service improvement in the public domain. Oxford, Oxford University Press.