Investors call for audits of market updates

INVESTORS and analysts would like to see companies’ preliminary financial statements audited, according to a report released today by PwC.

More than half of those interviewed by the accountancy firm said they would like to see interim results reviewed by third parties due to the important influence they had on deciding investment strategies.

There were also calls for independent appraisals of whether company’s adopt unduly aggressive accounting procedures, with particular concern about the reliability of adjusted earnings figures.

Meanwhile just 26 per cent of respondents said they felt that audit committees were sufficiently independent of management.

“While it is clear that no one group can solve the reporting challenge alone, audit committees have a key role and a huge opportunity given their apparent lack of profile with investors,” said PwC’s Richard Sexton.

“As the representatives of shareholders, they play a critical role in governing the audit of reported information.”

PwC interviewed 104 investors and analysts across 11 countries to produce the report.