In recent years, auditors have been receiving more requests from various regulatory bodies for reports on information about the entities being audited.
These reports deal with matters that the auditor may become aware of while completing the financial statement audit but that go beyond the scope of that audit. There have also been requests from government funding agencies that auditors report separately on detailed schedules of information underlying financial statement items without doing any further audit work on these detailed schedules.
From time to time, practitioners have asked what standard should be applied when responding to these requests. Currently, there is no standard that specifically addresses this matter.
This project proposes to introduce a new Related Services Standard that would cover various types of information reported to a third party (for example, regulators or funding bodies).
Key issues that this project will address include:
- How should “derivative reporting” be defined?
- What is the nature and extent of guidance that the new standard should include?
- How can the auditor clearly and effectively report to external parities on various matters in a manner that will be clear and minimize any user expectation gap?