Investment professionals challenged the timing of audit reports, arguing it was not effective to announce companies’ preliminary results before they were audited.
They also argued that closed-door talks between auditors and audit committees should be made public to share valuable information, though they conceded that more disclosure could reduce the frankness of debate.
PwC partner Richard Sexton said investors had “laid down the gauntlet” on audit information.
“Investment professionals interviewed do not believe they currently receive adequate information about the audit process,” Sexton said. “Most of those interviewed are under the misapprehension that information published in preliminary statements is always audited.”
A total of 73 per cent of the 22 interviewees said audits mattered to them and 81 per cent said they would be unlikely to invest in a firm if the auditor said the accounts were not correct.
But half said audits arrived too late to add value to their assessment of a company, while others heavily criticised their content.
“However little I read the audit opinion, it doesn’t compare with how little I read the audit committee reports,” one respondent said.
Audits have come under the spotlight since the financial crisis, when major institutions collapsed despite being given a clean bill of health by auditors. The Financial Reporting Council has said auditors did not use enough professional scepticism when challenging large clients’ accounts.