Historically, the audit report has comprised a boilerplate report providing a standard form opinion on the company's financial statements, except where there was a modification to the audit opinion. More recently, audit reports for FTSE listed entities are required to provide bespoke information about the auditor's key judgements in arriving at the opinion such as their considerations of risk areas and levels of materiality.
These extended audit reports (EARs) have been signed for all FTSE listed entities since their 2013-14 year ends and similar requirements will apply to all AIM listed companies from 2017-18.
It is expected that EARs will have a significant impact on how cases involving financial misstatement are investigated because details of the auditor's key judgements are publicly available. This Grant Thornton briefing explains how the EAR is now an important part of the initial analysis of a potential claim.