The Institute of Chartered Accountants of
Scotland (ICAS) has issued a report calling for the duties of
company auditors, directors and non-executives to ensure greater
transparency and accountability to shareholders.

The Future of Assurance outlines a
new model of corporate assurance, including the external audit and
assurance process and develops the responsibilities of the audit
committee and company directors.

The new model recommends boards to outline
rationale and key assumptions in concluding that a business is
viable for at least 12 months and for auditors to provide an
explicit opinion on going concern judgements of directors.

Other key recommendations include:

  • Assurance to be provided on the front half of
    the annual report by means other than a traditional audit opinion,
    utilising auditor knowledge of the business to provide comfort over
    the narrative reporting of management;
  • An expanded audit committee report disclosing
    key areas of discussion between the committee and external
  • Audit committees to disclose policy to
    ensuring an effective audit process. In addition to the annual
    review of the audit appointment, the audit committee should perform
    a more in-depth review every five years to include engagement with
    the shareholders; and
  • The audit committee chair and audit partner
    should appear at the annual general meeting and be prepared to
    answer written questions submitted on the disclosures in the audit
    committee report, with questions on the audit process and opinion
    directed to the audit partner.

The report was produced by a working group
chaired by ICAS past-president Douglas Nisbet and comprised of
investors, preparers, auditors and representatives from both media
and academia.