The financial statements, subject to the procedures of external auditing of an entity, are among the many pieces of information that investors consider when they evaluate where to allocate resources. But press releases, company presentations, additional information in annual reports and non-accounting key performance indicators, and financial metrics are also sources of information available to investors.
New auditing metrics:
Auditors aren't involved like many of these sources of investor information. There is a demand from other capital market participants for auditors to provide more real-time security of information that is outside the financial statements. These new metrics are becoming an increasing percentage of the mix of information that investors are trusting. Therefore, there is potentially an appetite for auditors to get involved in such a way that we can provide assurance that these numbers are being invoked by the markets.
Because of the strict rules governing auditing procedures, a collaborative process would be necessary to expand auditors' assurance. It's a process that would have to involve regulators, auditors, and investors.
Understanding audited information investors would be one of the most important parts of the process. Once it is determined, in standards, including professionals registered and certified in national and international bodies, it may need to be amended to allow auditors to carry out new or different procedures.
We want to work together to find out which of this information is directly within the competence of the external audit and whether it would benefit the auditors by carrying out some level of procedures and then telling the investing public what it is that we did.
The role of technology in auditing:
Technology also has a key role to play in refreshing and updating the audit to make sure it is aware of the needs of investors. The tools allow for the examination of much larger volumes of data, which helps auditors focus on more important risks. Such innovation can allow for higher quality and faster delivery and has the potential to reinvigorate talent.
