Recommendations of the Brydon Report for 2019 to Deal with This Gap

Several recommendations were made in the 2019 Brydon Report to close the audit expectations gap and improve the calibre and efficacy of auditing in the UK (Brydon 2019). These ideas have provoked discussions and disputes among stakeholders regarding their viability, possible effect, and consequences for the audit profession. Creating a new corporate auditing profession named “Corporate Auditor” is one of the main proposals made by the Brydon Report (Brydon 2019). By offering a wider and more thorough review of a company’s activities, this plan seeks to allay concerns about the scope and limits of the statutory audit. However, this suggestion has drawn criticism because it would lead to a conflict of interest and an overlap of duties between the proposed Corporate Auditor and the statutory auditor (Peck 2020).

Creating an Audit and Assurance Policy Committee (AAPC) within each organization is another important idea (Brydon 2019). The AAPC would supervise the efficiency of the audit process, have an ongoing and active discussion with auditors, and give clarity on company-specific risks. Although broad support has been for this idea to enhance communication and understanding between auditors and businesses, questions have been expressed about potential conflicts of interest and the added workload it could put on corporate boards (Canning 2019). The Brydon Report also recommended enlarging the audit report’s scope to cover a wider variety of data, such as predictions and the viability of a company’s business model (Brydon 2019). This suggestion aims to increase the value and applicability of audit findings to stakeholders. However, the practicalities and possible liability consequences of providing such forward-looking evaluations in audit reports are up for discussion (Smith 2020). The Brydon Report also suggested ways to strengthen the auditor’s obligation to report, highlighting the necessity for auditors to be more open about their conclusions and to include important audit issues and other pertinent data (Brydon 2019). Although this suggestion has been viewed as a step in the right direction toward improving the audit process, concerns have been expressed regarding the potential information overload and the requirement for clear criteria to guarantee uniformity in reporting (Pratt 2020).

The Brydon Report’s proposals have provoked discussions and arguments among stakeholders and within the audit profession. While some ideas have received positive feedback as potential ways to close the gap between audit expectations and audit quality, others have come under fire and raised questions about their viability, feasibility, and unexpected effects.

References

Brydon D (2019) The Independent Review into the Quality and Effectiveness of Audit: Final Report. Retrieved from https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/833858/brydon-review-final-report.pdf

Canning R (2019) Corporate Auditors. The ICAEW Chartered Accountant, October 2019, 38-39.

Deumes R. and Carchon S (2019) The expectations gap: How to close it? Auditing, Trust, and Governance: Developing Regulation in Europe, 7-31.