The confidential dialogue between companies and their auditors should be prised open to help investors understand the deliberations and disputes that lie behind reported sales and profits, an alliance of accounting experts will say this week.
The Audit Quality Forum, which represents investors, companies and accountants, will issue the call in a paper voicing concern that audits are becoming commodity services that do not generate useful information.
More than five years after the collapse of Enron, the initiative is a reminder that accounting reforms aimed at preventing similar scandals remain a work in progress.
The AQF has trained its sights on the audit report, a terse statement signed off by auditors that attests to the fairness of a company's financial statements. The report has taken on a "boiler-plate" format and gets little or no attention from investors, but the AQF says it has the potential to be one of the most illuminating parts of accounts.
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