Audit Reports – Balancing Harmonisation, Standardisation, and Customisation

The purpose of this article is to discuss the increased harmonisation of the rules on audit reports across Member States caused both by EU legislation, i.e. the Auditing Directive and the PIE Regulation, and the International Standards on Auditing (ISAs). All things being equal, this harmonisation of the rules on audit reports across Member States, of course, entails increased standardisation of audit reports across companies but, interestingly, for PIEs both the PIE Regulation and the new and revised audit report ISAs also entail increased customisation of audit reports between companies. At first sight, this customisation of PIE audit reports between companies seems incompatible or inconsistent with the general standardisation of audit reports across companies. However, the article shows that this, in fact, is not the case. Pursuing this purpose, the article identifies and discusses three overall audit report trends: (1) increased harmonisation of the rules on audit reports across Member States; (2) increased standardisation of audit reports across companies; and, for PIEs, (3) increased customisation of audit reports between companies.