EBA欧洲银行-2012-10-15EBA-comment-letter-re-IAASB-on-auditor-reporting-_5页_289kb

EBA's Comments on Improving the Auditor's Report

Core Content

The European Banking Authority (EBA) has provided detailed feedback on the International Auditing and Assurance Standards Board (IAASB)'s Invitation to Comment: Improving the Auditor's Report. The EBA supports the IAASB's initiative to enhance the auditor's report, emphasizing the importance of improving users' understanding of financial statements and increasing transparency in the audit process.

Main Views and Key Information

1. Auditor Commentary

• The EBA supports the inclusion of auditor commentary in the report as it enhances the informational value for users.
• The commentary should be entity-specific and avoid boilerplate language.
• There should be a clear distinction between the responsibilities of management, those charged with governance (TCWG), and auditors.
• The EBA recommends that the IAASB separate the information provided by these three entities within the report.
• The auditor's focus should be on their evaluation of management's estimates and judgments, and the audit procedures undertaken.
• The EBA encourages the IAASB to collaborate with the IASB to improve accounting and disclosure standards, placing more responsibility on management for providing comprehensive and relevant disclosures.
• The definition of public interest entities (PIEs) should be carefully considered, and the EBA suggests using different terminology than PIEs if the IAASB chooses to differentiate from the EU Directive's definition.

2. Going Concern

• The EBA supports requiring auditors to specifically report on the appropriateness of management's use of the going concern assumption.
• It is important to narrow the expectations gap by focusing the auditor's report on the work performed and entity-specific information.
• The EBA recommends including a short statement in the auditor's report explaining the auditor's role in evaluating the going concern assumption.
• The report should not provide assurance over unpredictable future events that may affect the entity's viability.
• The EBA emphasizes the need for a common definition of "going concern" and "material uncertainty" between ISA and IFRS frameworks to ensure consistency.

3. Clarifications and Transparency

• The EBA supports the separation of responsibilities between TCWG, management, and auditors in the report.
• It believes that the existing auditing standards already cover these responsibilities, so including them in the auditor's report does not add specific value.
• The EBA supports the disclosure of the engagement partner's name in the auditor's report, as it is already mandated in the EU framework and has not caused issues with audit quality.

4. Form and Structure

• The EBA welcomes the proposed structure of the auditor's report, which places the audit opinion at the beginning to highlight its importance.
• It supports an unequivocal binary opinion (unqualified or qualified) to avoid misinterpretation.
• Additional information, such as auditor commentary, should complement the binary opinion and not replace it.
• The EBA encourages the IAASB to collaborate with other international standard setters, including the EU legislative bodies and the PCAOB, to promote international convergence of audit standards.

Conclusion

The EBA's feedback highlights the need for entity-specific and transparent auditor reporting, with a clear delineation of roles between auditors, management, and TCWG. It emphasizes the importance of audit quality and the avoidance of boilerplate language, while encouraging collaboration with other standard-setting bodies to ensure consistency and clarity in audit reporting.