The Dubai Financial Services Authority (DFSA) and the Institute of Chartered Accountants in England and Wales (ICAEW) jointly organised an outreach event last week to conduct a briefing on the new Extended Audit Reports.

The event was opened by Mr Ian Johnston, Chief Executive of the DFSA, who provided an assessment of the DFSA’s approach to audit, and speakers included Mr Bryan Stirewalt, Managing Director, Supervision - DFSA; Mr Edward Quinlan, Audit Committee Member; Mr Richard Ackland, Partner - KPMG LLP and Mr Umar Saleem, Chief Finance Officer - Depa Limited. The session was moderated by Mr Michael Armstrong, FCA and ICAEW Regional Director for the Middle East, Africa and South Asia (MEASA). 

The event was targeted at publicly listed companies, DFSA Registered Auditors and ICAEW members and other stakeholders.

The panel discussed the new Extended Audit Reports which will be effective for audits of financial statements for periods ending on or after 15 December 2016. The panelists expressed their views about the challenges and opportunities of implementing Extended Audit Reports and also shared practical experience in implementing such reports in the United Kingdom (UK). 

In his Opening Remarks, Ian Johnston said: “The Auditor's Report is the primary means by which the auditor communicates information regarding the audit of the financial statements to investors and other financial statement users. As currently designed, however, the auditor's report conveys very little of the information obtained and evaluated by the auditor. In recent years, many investors and others have stated that auditors should provide additional information in the auditor's report to make the report more relevant and useful. The communication of key audit matters would inform investors and other financial statement users of matters arising from the audit.”

Mr Michael Armstrong said: “The extended audit report is definitely a game changer for all market participants. It does not only provide the key audit risks of material misstatement, but also a simplified insight into complex accounting treatments and transactional issues.

“The need to disclose information on the scope, materiality and areas of focus in audits will greatly increase the quality of debate auditors have with management, audit committees and boards.”

The event was well attended by over 75 stakeholders.