Extended Audit Reporting - An Insight from the Auditing Profession in Poland

The audit-reporting model has been on the agenda of researchers and regulators for a long time. The recent regulatory proposals, consultation papers, discussion and research reports on audit reporting have intensified the discussion whether the current standard audit report communicates the appropriate information to the users of the report. As a result the new regulation proposed in the EU but also in the US aims at decreasing not only the expectation but also the information gap between in the auditors and the users of the report. The Polish auditing model is an interesting case to study in the context of audit reporting. Poland already has experience in the preparation of an additional report, which is aimed to provide more information to all stakeholders. The requirement of the presentation of not only of a short-version, standard audit report but also an extended version of the audit report was introduced for the first time in 1991 and has been preserved in the later versions of the Auditing Act and the Accounting Act. The paper seeks to address two questions. The first one is to what extend the Polish extended audit report contribute to the reduction of the expectation and information gap and the second question is about possibilities of improvements of the audit report in general. Based on our interview findings we conclude that the auditors perceive the audit report to be generally useful for its users. However, the analysis of data provides mixed evidence with regard to the extended audit report. Auditors acknowledge the usefulness of the extended audit report to report on additional issues and concerns, but at the same time the standard form of the extended audit report as prescribed in the Polish Auditing Standards is found to have little information value to its users