UK Financial Reporting Council chief executive
Stephen Haddrill said the wake of the financial crisis is the right
time to review the value of audit and investigate whether it can be

Speaking at an Institute of Chartered
Accountants in Scotland event, Haddrill said audit is a key part of
high quality governance.

“The auditor sees the company’s approach to
risk. The auditor challenges management’s judgement on the
financials,” Haddrill explained.

“The auditor reports to shareholders on
whether the company is providing a true and fair view of the
business. The investor only sees the tip of the iceberg of work.
But nevertheless investors are relying on that work being

Haddrill said some of the key issues that need
to be addressed are:

  • How do we achieve a strong alignment between
    the auditor and the interests of the shareholder?
  • Do we need to change the form of the audit
    report to make it more useful?
  • Does more need to be said in the front of the
    report about risk and the business model and should the auditor
    provide greater assurance about such matters? And,
  • Can auditors give more help to regulators and
    avoid conflicts of interest in doing so?