The AICPA submitted comments in response to the United Kingdom’s Brydon Review into the audit’s quality and effectiveness. While the review is based in the United Kingdom, its impact could reach internationally, with consequences for global practice and the global economy.
In the letter, the AICPA expressed support for the purpose of the Brydon Review, and supported the position that most audits are conducted to a high quality and that the good should not be discarded in a search for the better.
The letter identified two key factors that should be considered in recommending any changes as a result of the review. First, it is necessary to identify the users of financial and non-financial corporate information. The value of audit and whether the audit serves the public interest can only be assessed based on whether the needs and expectations of users are met. These needs and expectations can vary greatly depending upon the user. For example, for audits of listed entities the needs and expectations of investors may be different than the needs and expectations of prudential regulators.
Second, there is a need to describe what is meant by the “public interest.” Arguably, all auditors would say that they discharge their work and produce the audit product in the public interest, but diverse views exist as to what “acting in the public interest” means.
The AICPA also responded to specific questions posed by the review, such as for whose benefit audits are conducted and whether the audit should be designed to enhance the degree of confidence of intended users in the entity or just in the financial statements.
The Chartered Institute of Management Accountants also submitted a response to the Brydon Review.