The new generation of expanded audit reports includes disclosures about significant matters ina company’s financial reporting and its audit. These disclosures are a landmark changein auditors’ responsibility to provide information to the public. I examine expanded reportsin various jurisdictions, why they became mandatory, what the evidence from theirimplementation is, and whether they have fulfilled the expectations of regulators and otherstakeholders. Expanded reports are intended to increase the information content andusefulness of audit opinions, to increase external monitoring of auditors and management,and to foster a more open conversation between auditors and users of financial reporting.However, existing regulatory requirements, conflicting auditors’ incentives to provide newinformation, and evidence from the expanded reports’ implementation call into questionwhether these objectives have been met. It is my hope that expanded reports are only a firststep towards enhanced auditor reporting.
展开▼
