Transparency Report 2020

The 2020 financial year ended fairly differently than it began. The year started out building on the momentum from 2019 with a focus on financial reporting, independence of auditors and the quality of audit procedures sufficient to identify misleading reporting (related in particular to corporate collapses and fraud).

The Parliamentary Joint Commission into the regulation of audit into Australia issued an initial draft report in February 2020. By the end of March, Australian cities were in lockdown. Whilst COVID has delayed any finalisation of the recommendations in the report, overall there is support for the recommendations and as a firm, we have already started to implement some of the draft recommendations. Audit quality is a focus issue all over the world, with the UK leading the way for change when it comes to operational separation of audit services within a firm.

In times of crisis, audit quality becomes even more essential. We responded quickly to accommodate remote working via our existing technology platforms and investing in new technologies such as WLA, Audit Dashboard and client/staff webinars to enable people with the tools to adapt through the crisis. For our audit team, the focus rapidly changed to deal with matters brought about by COVID, and in particular:

• Quality of financial reporting and auditing whilst working remotely.
• The significant effect of COVID on businesses and the subsequent impact on accounting methodologies – in particular, impairment and growing concern.
• Dealing with disclosure around the uncertainty which COVID has brought to fair value assessments and operational results.

The common link between all of this has been the absolute necessity for quality financial reporting backed up by quality audit procedures. Capital markets and users of financial reports absolutely depend on this information. A recent survey by Chartered Accountants ANZ on Australian Investor Confidence pleasingly shows strong confidence in audited financial reporting by investors.

We have seen a shift by Boards to focus on quality financial reporting and the auditors' approach to key audit matters. Their assessment of audit firms and engagement teams have extended past the ‘big is better’ and the location of an expert is no longer relevant – geography is history. COVID has accelerated digital and online access, communication and training.

We welcome the opportunity to share a snapshot of our investment in our people and in the quality of our audits in this Transparency Report for the year ended 30 June 2020. This report is a public statement of our commitment to good corporate governance and ongoing, transparent communication with our stakeholders – our clients, audit committees, regulators and the wider public. We provide quality assurance services to organisations in Australia and around the globe, and this report sets out how we comply with the requirements of the Corporations Act 2001 and the steps we have taken to drive audit quality across our business.

Grant Thornton Australia has voluntarily produced an annual Transparency Report since 2008.