Auditor Reporting Requirements and Other Communication Considerations in a Single Audit

The Private Securities Litigation Reform Act (Reform Act) was enacted as law in 1995 and represents a major victory for the public accounting profession. Since audit reporting for publicly traded companies that enter bankruptcy continues to be of interest to legislators and the public, the Reform Act also includes audit reporting requirements regarding the auditor's assessments of a company's ability to continue as a going concern. This study examines the potential impact of the Reform Act on auditor reporting by examining audit reports for 383 bankrupt companies during the 1991–1998 period. The results indicate that, after controlling for financial stress, company size, default status, audit reporting lag and bankruptcy filing lag, auditors were less likely to have issued prior going-concern modified audit reports for bankrupt companies after the Reform Act.

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Implications of recent reforms to auditor reporting requirements in Australia

Meditari Accountancy Research ◽

10.1108/medar-05-2020-0901 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Md Mustafizur Rahaman ◽

Parmod Chand

Keyword(s):

Stock Exchange ◽

Policy Implications ◽

Audit Report ◽

Financial Reports ◽

Content Type ◽

Reporting Requirements ◽

Reporting Framework ◽

Auditor Reporting ◽

High Degree ◽

Practical Implications

Purpose This paper aims to address a topical and controversial issue, namely, the degree of conformity with the new auditor reporting requirements in Australia and the extent of variations in the reporting of key audit matters (KAMs) by Australian firms. Design/methodology/approach This paper compares the 64 elements identified in the applicable standards with the auditor’s report from the sampled companies to determine the degree to which the top 200 firms listed on the Australian Stock Exchange are complying with the requirements of the new audit report. This paper investigates KAM disclosures within and across industries. Findings The results indicate that there is a high degree of conformity with the new reporting framework, yet significant variations in the contents of the report, particularly in KAM disclosures. This paper observes that the number of KAMs and their extent of disclosure generally varies within industries. The types of KAMs presented vary both within and across industries. This paper further provides evidence that auditors have a tendency of not disclosing negative KAMs and tend to avoid negative wordings when describing KAMs. This paper also finds that there are significant differences in the placement of various types of KAMs in the audit report. Practical implications These findings have important policy implications for the standard-setters, regulators, auditors and users of financial reports on the adequacy of the new auditor reporting framework. Originality/value This study is one of the first to examine the degree of conformity with the new audit reporting model in Australia.

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Auditor Reporting Requirements and Other Communication Considerations of Government Auditing Standards

Audit and Accounting Guide: State and Local Governments ◽

10.1002/9781119651512.ch4 ◽

2019 ◽

pp. 55-120

Keyword(s):

Reporting Requirements ◽

Auditing Standards ◽

Auditor Reporting ◽

Government Auditing

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Auditor Reporting Requirements and Other Communication Considerations of Government Auditing Standards

Government Auditing Standards and Single Audits ◽

10.1002/9781119449973.ch4 ◽

2017 ◽

pp. 51-115

Keyword(s):

Reporting Requirements ◽

Auditing Standards ◽

Auditor Reporting ◽

Government Auditing

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Assessing the impact of the new auditor’s report

Pacific Accounting Review ◽

10.1108/par-02-2018-0011 ◽

2019 ◽

Vol 31 (1) ◽

pp. 110-132 ◽

Cited By ~ 7

Author(s):

Hong Li ◽

David Hay ◽

David Lau

Keyword(s):

New Zealand ◽

Audit Quality ◽

Audit Fees ◽

Relevant Information ◽

Content Type ◽

Reporting Requirements ◽

Abnormal Accruals ◽

Auditor Reporting ◽

Audit Reports ◽

The Impact

Purpose Changes to the auditor’s report have been proposed and issued internationally to provide more relevant information to users and enhance the perceived value of financial statement audits. This paper aims to investigate the impact of audit reporting changes on audit quality and audit fees in the New Zealand context. Design/methodology/approach The authors examined audit quality measured by absolute abnormal accruals and audit fees for New Zealand listed companies. Findings The evidence suggests the enhanced audit reports were followed by an improvement in audit quality as proxied by a reduction in absolute abnormal accruals upon the adoption of the new audit reporting requirements. There was also a significant increase in audit fees. Practical implications Although the new auditor reporting requirements are associated with improvements in audit quality, such benefit does not come without cost. Originality/value The study provides evidence about the impact of this recent substantial reform to auditing.

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