Relevance of auditing based on social concerns
Beyond statutory assurance services, there is growing commercial interest in the validation and certification of information. Examples include voluntary audits of risk management systems, tests of internal control systems (ICS) as a supplement to the statutory audit of the existence of an ICS, cyber security reviews and sustainability report audits. Economic risks, emergency loans and political initiatives, such as the corporate responsibility initiative, are all driving the higher demand for audit services. As a result, audit and advisory is gaining relevance far beyond its traditional fundamental statutory role.
The corona pandemic and the related economic crisis, as well as the emergency lending undertaken as a means of combating the crisis, have created much uncertainty, and many questions are still unanswered. The Swiss Federal Council responded appropriately to the repercussions of the Covid-19 crisis, implementing measures such as short-time working and a new emergency lending programme to assist companies with liquidity problems, which are the biggest threat to companies’ existence in the near term. The approach taken to monitoring and controlling how the funds are used will now be decisive. EXPERTsuisse, Swiss Expert Association for Audit, Tax and Fiduciary, has the perfect tool for this purpose in the form of the Covid-19 audit.
Greater responsibility through transparency, disclosure and auditing
Another social concern is sustainability and, increasingly, reporting in this area. The corporate responsibility initiative (CRI) to be voted on by the Swiss electorate is just one element of a wide-ranging public discussion regarding companies’ responsibility and role. The CRI requires companies to adhere to extensive due diligence requirements with regard to the environment and human rights. The counterproposal is more fully developed and targeted. EXPERTsuisse is opposed to the initiative, as it does not take account of international circumstances and is too far-reaching. EXPERTsuisse finds that the counterproposal also leaves many questions unanswered, but believes the audit profession can provide the appropriate responses.
For many years, auditors have been auditing sustainability reports or have been engaged to prepare sustainability reports. The profession is thus well versed in this subject and the existing international standards. Moreover, the profession also audits compliance management and risk management systems. Auditors are therefore in a position to provide support on the due diligence and transparency requirements of the CRI and the counterproposal through both audit and advisory services.
An ordinary audit does not guarantee the absence of violations or fraud
Auditors cannot be expected to identify all violations and instances of fraud in the execution of their statutory duties. The fight against corruption in companies can only succeed through a combination of various measures. These include having
- an ethical board of directors,
- clear control and reporting structures,
- an ethical corporate culture,
- an auditor who has the full support of the board of directors and unrestricted access within the company.