Study: Two-auditor model does not improve auditing

Study: Two-auditor model does not improve auditing

Photo: ANP

The control of financial reporting by large companies does not improve significantly if two accountants from different firms have to approve the financial statements. That is the conclusion of experts (quartermasters) who, at the request of Minister Wopke Hoekstra (Finance), are examining various improvement measures for the accountancy sector.

The idea behind the so-called joint audit model is that two accountants who are not at the same office would keep each other on their toes. It would also provide the opportunity for smaller audit firms to gain experience with the legally required auditing of the books of, among others, listed companies.

But the experts Hoekstra appointed to investigate alternative structural models now conclude that the benefits “appear to be limited”. Regulators at home and abroad are also not convinced. The joint audit model can also lead to higher costs for companies, warn the quartermasters.

The so-called audit-only model is also being examined. In addition, accountancy firms should put their advisory activities at a distance. They thus serve customers whose books they also check. In practice, this can lead to conflicts of interest. Hoekstra expects the results of that study in mid-2022.

The third variant that the quartermasters are researching is the intermediary model. An independent intermediary, for example a semi-public institution, is placed between the companies and the auditors. The results of that study are expected at the end of 2023.

The quartermasters only want to draw definitive conclusions when all three investigations have been completed. Hoekstra agrees.

Study: Two-auditor model does not improve auditing
Source link Study: Two-auditor model does not improve auditing

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