KPMG Offering Expanded Audit Reports Because Regular Audit Reports are Useless

As part of its campaign to restore trust in audit in the wake of the financial crisis, the firm experimented with increasing the amount of useful information provided in the new long-form audit report, way beyond the minimum regulatory requirements.

As well as reporting on the risks and the auditors’ response to them, KPMG also included commentary from the individual senior audit partner. This included a discussion about qualitative matters with the aim of helping to add colour and depth, and to “emphasise areas of risk that concern management, audit committee and investors alike”.

The outcome was so successful that City Equity Research was moved to say, “KPMG’s report on Rolls-Royce should be regarded as best practice, in our view.” [economia]

Related articles

What Price Wrong-Doing? Sanctions Against KPMG Are Complicated

“Sell in May and go away” was an investors’ adage invoked as vacation strategy in a more genteel era. Returns in the summer were said to lag the rest of the year—and in any event, that’s how brokers justified their holiday cottages on the eastern seaboard. This year the maxim has twice failed my attempt […]