Auditing Standards for Web-Based Reports—Is it Time for a Change?

• In Event: Auditing 1

Abstract

In this paper, we present a review of the auditing standards over web-based reports. We examine the regulatory environment affecting digitized financial reporting, including clarified auditing standards issued by the AICPA and auditing standards currently in effect for public companies as maintained by the PCAOB. We find that auditing standards have not been updated to reflect the current digital reporting environment. Businesses have adapted their business reporting to take advantage of the modern web reporting environment, creating a complex reporting environment that differs considerably from the paper-only era and obscures the assurance services applied to data presented. Unfortunately, regulators have done little to keep pace with these changes. In this paper, we provide an example of business reporting using Johnson and Johnson (www.jnj.com), describe the current state of auditing standards that cover financial disclosures made on the company’s website, and provide some suggestions about changes needed to make the standards more relevant for electronic reporting.

Authors

• John A Pendley, Susquehanna University

• Jerrell Habegger, Susquehanna University