Preface
Recent changes in the UK regulatory framework have resulted in financial reporting and auditing becoming increasingly complex and highly regulated activities. A key regulatory change is that a company audit committee is now expected to play a significant role in agreeing the contents of the financial statements and overseeing the activities of the auditors. This book presents the results of a research study exploring the high level process of interactions between the Chief Financial Officer (CFO), Audit Committee Chair (ACC) and Audit Engagement Partner (AEP). This vital process is unobservable to third parties but significantly leads to the agreement of the numbers and disclosures which are published in the financial statements and to the issuing of the auditor's report which accompanies them. The book reports survey findings which identify the issues that CFOs, ACCs and AEPs discussed and negotiated. This is followed by rigorous analysis of case-study interviews with the CFO, ACC and AEP in nine listed companies, where the interactions and the influences on their outcomes are explored in depth, providing new insights into the process and the effectiveness of the changed regime. This evidence is highly relevant to current debates in the UK, EU and internationally concerning the value of audit, IFRS and the relative merit of rules-based versus principles-based accounting standards in relation to professional judgement and compliance.
