PwC engages stakeholders on new Auditors’ Report Standard

PricewaterhouseCoopers (PwC) Nigeria, a professional services firm, has called on Nigerian companies and auditors to test run the new International Auditing and Assurance Standards Board (IAASB) auditors’ report model at least once before the required reporting period.

The call was made at a breakfast meeting held by PwC for stakeholders, during which key changes to the auditors’ report model and the implications of the new model for boards, managements, regulators and auditors were presented.

Welcoming participants, which included senior finance executives, audit committee members and regulators drawn from various sectors of the economy, Uyi Akpata, country senior partner, PwC Nigeria and regional senior partner for West Africa, said PwC had always found it necessary to engage stakeholders on matters concerning financial reporting, noting that the session would be a first in the series as the country move towards the December 2016 implementation period.

He said: “The new IAASB standard is long overdue and a product of many years of discussions among stakeholders on how to make the auditor’s report better. The new model is exigent at this time when there is increased call even among the general citizenry for transparency, good governance and clarity in financial reports.”

Tola Ogundipe, partner and leader for PwC Nigeria, sets the tone for the day’s session by briefly tracing the history of the new standard and highlighting some key areas the new model departs from the one currently in use.

“The new standard is the end product of a process that started in 2006, when the IAASB and the American Institute of CPAs (Certified Public Accountants) commenced a joint academic research to identify, and provide information and insights on user perceptions regarding the financial statement audit and the auditor’s report among different classes of financial statement users.

“In January 2015, the IAASB released a set of new and revised auditor reporting standards to become effective for financial statements relevant for periods ending on or after 15 December 2016, though early application is permitted,” Ogundipe said.

Cyril Azobu, partner at PwC Nigeria, presented the key changes to the audit report. He noted that the changes the IAASB were introducing to the auditors’ reports centre on three key aims: insight, transparency and improved readability.

The new standard also gives ‘Going Concern’ more visibility as it describes both the management’s and auditors’ responsibilities regarding going concern.

Another feature of the new model is the emphasis it gives to ‘Key Audit Matters,’ which must now be captured and reported by the auditor in the report.

He enumerated the content of the new reporting model to include opinion, basis of opinion, and material uncertainty regarding going concern.