A new Chartered Accountants Australia and New Zealand (CA ANZ) and Association of Chartered Certified Accountants (ACCA) survey of 1000 Australians shows public demand for greater scope for auditors to prevent corporate collapses and address environmental and societal issues.
Nearly two thirds of respondents (63%) would like the role of auditors to evolve to prevent corporate collapses; 42% want auditors to address more environmental and societal needs.
These expectations go beyond current auditing standards.
"The survey results are a sign that we are at an important crossroads as a profession," Amir Ghandar, CA ANZ Reporting & Assurance Leader said.
"There is a new energy behind reimagining audit and technology is opening up new options to deliver what people are looking for in terms of confidence and reliable insights in a range of areas."
"While audits to date have focused on financial reporting, there is a demand for additional assurance over new risks investors and the public face ranging from business viability to cyber security, climate change and even organisational culture."
"An audit will never be an immunity against anything going wrong ever in business or institutions, but the reality is a lot more can be done in terms of making sure the right systems and controls are in place to protect the investing public and consumers, and whether it's in financial services, utilities or other sectors, auditing should be part of that conversation," Ghandar said.
The survey conducted in February 2019 showed a large amount of confusion among the public over what financial statement auditors do, and that the public have high expectations of auditors when it comes to detecting and reporting fraud.
There was limited support for new measures such as capping of non-audit services provided to non-audit clients, or ones being discussed in the United Kingdom, for example audit-only firms.
Other key survey findings:
There is confusion over what an audit is. 34% respondents know that an auditor gives an opinion on whether a business's financial statements give a true and fair view and do not include material mistakes due to fraud and error.
The auditor's role in relation to fraud is misunderstood. 40% of respondents expect auditors to always detect any fraud. Auditors are responsible for detecting fraud that materially affects the financial statements. However, this is not always possible due to inherent limitations.
59% of respondents would like audit to evolve to address solvency, liquidity and viability.
About the survey:
Held in February 2019 to gauge understanding and expectations of audit.
1000 members of the general public in Australia were surveyed.