In the context of increasing demand by investors, regulators, and other stakeholders for more expansive information about companies' operations, risk mitigation activities, and values than has been the case historically, "The Role of Auditors in Company-Prepared Information: Present and Future" from The Center for Audit Quality explains why auditors are well-positioned to evolve their role to foster the reliability and credibility of non-financial company-prepared data and information, including information about ESG/sustainability matters, the company's cybersecurity risk management efforts, and value creation.
Notably, in discussing three characteristics that contribute to decision-useful information (i.e., reliability, comparability, and relevance), the publication defines comparability outside the financial statement context in a way that accommodates the use across companies of different frameworks to account for company-specific facts & circumstances by emphasizing the importance of transparency. More specifically, the CAQ posits that good disclosure by the company about what is being measured and how, how the information will be used, and whether the information has been independently assured, can facilitate desired information/data comparisons by investors (or other users) across companies without imposing on companies a one-size-fits-all framework on information/data types that do not lend themselves to uniformity.
The publication makes a strong case for auditors having the requisite skills and other tools to provide information/data assurance outside the traditional historical financial statements arena.
See last week's report: "Assurance of Non-Financial Disclosure: Here's How!", our 2017 report: "AICPA Releases Cybersecurity Reporting & Attest Framework," the CAQ's "The CPA’s Role in Addressing Cybersecurity Risk," the AICPA’s Sustainability Resources page, and this WSJ article: "Auditors Look to Modernize Rules to Include Environmental, Social and Cybersecurity Issues." Additional resources are posted on our Audit & Audit Firms, Cybersecurity/Data Privacy and Sustainability/ESG pages. This post first appeared in the weekly Society Alert!