MR No. 2016 – 12
13 June 2016
The Financial Markets Authority (FMA) has released its auditor regulation and oversight plan for 2016. The FMA’s plan sets out the new style of audit report issued by the External Reporting Board, intended to provide better information to investors.
The new auditor’s report includes new standards for listed entities: an auditor will be required to communicate key audit matters, and their report will include the name of the engagement partner. The auditor will report on significant matters in the audit of the financial statements, explaining why the matter was significant and how the matter was addressed by their audit work. This is expected to improve the information available for investors.
The new auditor’s report also gives auditors the opportunity to explain their work and to provide additional information, and the FMA expects reporting that reflects the uniqueness of each business.
The 2016 oversight plan, aimed at auditors, preparers of financial statements and directors of Financial Markets Conduct (FMC) reporting entities, details the main areas of focus for the FMA over the next three years with the intent to improve audit quality and to get better recognition of New Zealand auditors overseas. The FMA also explains how it will perform the audit quality reviews in-house as these have previously been done by NZICA.
A full copy of the 2016 auditor regulation and oversight plan may be found here.
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