Question: The audit report is a rather crude device to inform shareholders about the auditors satisfaction, or dissatisfaction, with the view given by the financial statements

The audit report is a rather crude device to inform shareholders about the auditors’ satisfaction, or dissatisfaction, with the view given by the financial statements and their compliance with the Companies Act and with the accounting framework used in their preparation. It would be beneficial to shareholders and other users if the auditor graded the financial statements using a number of attributes, somewhat along the lines of a school report card. Discuss.

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Introducing a grading system for financial statements in audit reports similar to a school report card could offer several potential benefits for shareholders and other users Enhanced Transparency and ... View full answer

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