KPMG’s ISG recently issued Enhancing Auditor Reporting: Providing Insight and Transparency, which discusses how investors, audit committees, and company management may be affected by the new International Standards on Auditing (ISAs), and identifies steps that those parties can take to prepare for the change. The new ISAs will require auditors to describe in the audit reports of listed entities key areas of audit focus and audit work performed over those areas. Auditors also will be required to provide more transparency about the auditor’s and management’s responsibilities with respect to the audited financial statements.
For audits performed in accordance with the ISAs, the new requirements are effective for annual periods ending on or after December 15, 2016. However, a jurisdiction may set an effective date that is earlier or later than the international effective date. Early adoption is permitted.