Value of Audit Value of Audit

The audit remains a highly valuable and important part of the workings of the capital markets. However, as both audit stakeholders, investors and KPMG auditors agree, it has to evolve if it is to retain its relevance. Why is this? One of the principal factors is that the audit remains primarily an examination of historical financial information – but investors are looking for more forward-looking and contemporary information. They are as concerned with what drives share price and value creation as with the financial statements, and there is wide recognition that a greater part of a company’s value is either an intangible asset that’s on the balance sheet or some kind of intangible value that’s not even recorded. An audit cannot be more relevant than the information that is subject to the audit – so does its scope need to be widened? And if so, what would need to happen to make this feasible?