Narrative Information in Reports to Be Read by Auditors
APB has been reported to have asked the auditors to read the narrative information included in the audit reports. APB is a part of Financial Reporting Council and is highly committed in improving and developing the auditing practice in the Republic of Ireland and United Kingdom.
APB endeavors to set high standards of auditing. It wants to ensure that the public confidence is maintained in the auditing practices and processes. It feels that the auditors should not overlook any aspect while reading or making audit reports as it is necessary for meeting the requirements of financial information.
A consultation paper was released by the Auditing Practices Board (APB) regarding the revision of ISA (Ireland and UK) 700. The paper stresses the importance of reading the narrative information in annual reports. According to the paper an auditor can describe the audit in the report by using the APB website description.
Two descriptions of the audit report have been included in the APB’s website. These audit descriptions are applicable to both non-publicly as well publicly traded companies of UK and Ireland respectively. In the consultation report a recommendation has been made to replace these descriptions with a generic description. It is asserted that the generic description is applicable to all entities. This is considered to be good as it will reduce unwanted complexities.
In the generic description the auditor’s responsibilities regarding the auditing standards are addressed. It just describes the responsibilities which are applicable to all audits and does not include the broader reporting responsibilities of the auditor. Both the fields like auditor’s opinion section and the areas where the auditor is required to give a special report are not included in the generic description.