PwC Survey: Companies and investors want more information about the potential risks of their businesses in the audit reports

PwC Survey: Companies and investors want more information about the potential risks of their businesses in the audit reports

București, august 2019 Companies and investors believe that audit reports should provide more clarity and insight into the company’s potential risks and future prospects and on how well-equipped the auditor thinks the company is at managing them, according to the PwC’s Survey The Future of Audit - Perspectives on how the audit could evolve. Most of those interviewed appreciate the quality of the present audit activity, but believes it can be improved, including through automation and artificial intelligence (AI) that would allow auditors to eliminate repetitive tasks and focus more on understanding the business. ” The audit matters and needs to evolve. If a company is getting into difficulty, the consequences impact both the shareholders and the specific market or other sectors. In this context many questions have arisen about the future of the audit, and the PwC survey is a starting point in this approach, which requires a fundamental overhaul of the entire reporting system to give stakeholders the confidence that the information is reliable”, says Kenneth Spiteri Partner, Assurance Services Leader, PwC Romania. The survey results: • Both the investment community (68%) and business leaders (80%) think today’s statutory audit serves the needs of companies. • 41% of the investment community and 68% of the businesses surveyed feel that the audit meets the needs of investors. • 72% of investors and 79% businesses are in favour of more information about a company’s future prospects and risks in the central scope of a statutory audit. • 76% of investors and 84% of business leaders believe the use of technology such as AI, automation, data analytics would increase the efficiency with which the audit is performed. • While there is a consensus that technology will increase the level of scrutiny and overall quality of audits, only 37% of businesses and 36% of investors think technology will enable auditors to better understand a business. • There is also broad backing for strengthening the quality of reporting by bringing a company’s internal controls within the scope of the audit and strong appetite amongst investors (64%) and businesses (82%) - large and small, listed and family-owned - for the scope of the audit to be flexible and tailored to the type of company being audited. “Even though by its nature, auditing refers to the past, investors and other stakeholders are more concerned about the future. For this reason, the survey showed that they want from the audit a single coherent report on which they can make informed decisions. Auditors are expected to have a deeper understanding of the business and provide them more information about the company's perspectives and scenarios in which the business model might fail”, says Kenneth Spiteri. PwC recognizes the need for an audit change to meet customer needs and restore confidence in the quality of this process. In this context, it has recently announced a new package of measures designed to increase the quality of the audit, mainly targeting investments in training, people and technology. About the survey The survey was conducted in the first half of this year among over 600 investors, business leaders, representatives of the public sector and the academics in the UK on how auditing can and should evolve. About PwC At PwC, our purpose is to build trust in society and solve important problems. We are a network of firms in 158 countries with over 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2019 PwC. All rights reserved.

News on the subject