Dixon Hughes Goodman LLP (DHG) has responded to the Auditing Standards Board’s (ASB) Proposed Statements on Auditing Standards - Auditor Reporting and Proposed Amendments—Addressing Disclosures in the Audit of Financial Statements, and the Auditor’s Responsibilities Relating to Other Information Included in Annual Reports.
DHG is supportive of the ASB’s efforts in modernizing the auditor’s report to provide information that is of critical need to stakeholders, while maintaining the value of the ‘pass-fail’ opinion. We commend the ASB for their efforts in developing a balanced approach that considers the views of numerous stakeholders, while aligning with the auditing standards of both the International Auditing and Assurance Standards Board (IAASB) and Public Company Accounting Oversight Board (PCAOB). Furthermore, we are supportive of the ASB’s efforts in clarifying the auditor’s responsibilities related to other information. We believe the Other Information Proposal could potentially reduce diversity in practice with respect to documents that are considered to be within the scope of other information, while potentially narrowing existing expectation gaps by requiring auditors to clarify within their auditor’s report their responsibilities related to other information. However, we do have concerns there are certain areas that could negatively affect the profession; in particular the risk of the audit firm being the source of original (and potentially confidential) information about a company. We also believe clarification of the optionality of the KAM Proposal and scope of the Other Information Proposal, would benefit the profession.
DHG’s letter includes our views, observations, and recommendations on both the Auditor’s Report Proposals and the Other Information Proposal. Our responses are framed by our experiences serving numerous private companies, middle-market public issuers, and non-issuer brokers and dealers, and include our concerns regarding the potential implications the proposals could have for medium to larger-sized accounting firms.
Click below to read the full response letter.