Value of Audit

Since 2014, KPMG has sought the opinions and views of stakeholders and investors through a global series of roundtable discussions on the value of the audit report, the audit profession and what needs to change to meet the evolving needs and changing expectations of business, capital markets and society. We have also asked many of our most experienced auditors from across our global network to reflect candidly on where they see audit’s value and what changes should be considered to ensure the audit remains relevant and best serves the public interest. This discussion is critically important to the effective functioning of the capital markets and KPMG is committed to continue to lead the discussion by engaging directly with our stakeholders to listen, learn and play an active role in building public trust.

Improving communication between stakeholders

As auditors, we glean huge amounts of information and insight into a company, and the risks it faces, during our work – but only a limited amount of that is communicated to the outside world. A lot of it stays inside the organisation and in discussions with audit committees which range across a whole raft of key issues such as internal controls, risk management and IT systems. We have heard from investors and they clearly want more – more information that provides insight rather than just describes. They want to know how companies have handled risks and mitigated them. In our roundtable discussions with investors, many would like to see non-GAAP financial measures (supplemental information) clearly reported and that there is consistency over time. Better communication might also help to potentially combat investor short-termism and encourage a longer term view. Audit committees, for their part, have indicated an interest in more feedback from investors on the information they provide and whether it is actually helpful to investors. Working together to improve communication will bring a new level of transparency, and may play an important role in restoring trust in business.