Deloitte Audit

The Auditing Profession Bill

• Submission made 13 October 2005

Items being addressed

• The multidisciplinary firm
• Reportable irregularities
• Constraints on first time appointment
• Accountability of others
• Liability and registration of auditors

Multidisciplinary firms

• A history of the multi-disciplinary firm
• Why should audit firms be allowed to have non-auditors as partners?

A history of the multi-disciplinary firm

• The complexity of financial reporting increased owing to
• tax,
• information systems and
• financial instruments
• Specialist skills were needed to enhance the response in audits to this

Why should audit firms be allowed to have non-auditors as partners?

• It is the right thing to do
• The complexities faced in a financial statement audit demand the use of specialists
• These specialists improve the rigour of audits, which benefits stakeholders
• The added benefit to management in the insights provided improves the quality of financial accountability and governance

Our specialist skills

• This chart represents the number of partners in the service lines which provide support to financial statement audits.

Examples of specialist skills we use on audits

• Information technology skills, including IT security specialists and specialist knowledge in specific applications, such as SAP, BAAN, PeopleSoft
• Forensic audit skills, in particular in the identification and response to fraud risk factors
• Controls skills, in particular in the area of financial statement reporting controls
• Actuarial skills, in particular in assessing the valuation of long term items such as pension fund liabilities, financial instruments and asset impairments
• Valuation and transaction skills, so as to play our role as reporting accountants and corporate advisors on listed company audits where transaction support services are required from the auditor
• Taxation skills, particularly in the area of compliance and appropriate raising of tax liabilities
• Regulatory skills, particularly in the regulated industries, such as banks and insurance companies.
• Accounting technical skills in the interpretation and application of complex accounting standards
• Legal skills, in the interpretation of legal arrangements to ensure the correct accounting and disclosure of these