New Insights on Audit Reports: New CFA Society Germany Survey Highlights Weaknesses and Opportunities

Frankfurt am Main, January 15, 2025 – CFA Society Germany has published its latest study, “Survey on Audit Reports: Experiences from Analyses and Evaluation.” Conducted among its members, the survey provides in-depth insights into the use and perception of audit reports. At the same time, it identifies shortcomings and offers actionable recommendations to enhance the value of these reports for stakeholders.

A Key Role with Untapped Potential

Audit reports play a vital role in assessing financial health, corporate governance, and regulatory compliance. They not only support internal decision-making but also act as an essential source of information for investors and regulators. However, the survey results reveal that audit reports often fall short of stakeholder expectations in areas such as comprehensibility, relevance, and risk assessment.

“Audit Reports Are More Than a Formality”

“Audit reports are crucial tools for informed decision-making, essential beyond their role as regulatory documents. Our survey emphasizes their central role in enhancing information quality and urges collaborative efforts among auditors and regulatory bodies to strengthen their credibility,” explains Prof. Dr. Matthias Meitner, CFA, Chair of the German Advocacy Committee of CFA Society Germany.

Key Findings of the Survey:

• High relevance but limited comprehensibility: 65% of respondents regularly use audit reports, particularly for analyzing financial positions and assessing risks. However, 53% find the reports difficult to understand, primarily due to complex regulatory requirements and technical language.
• Deficiencies in risk assessment: 45% of participants criticize auditors’ evaluations as too cautious. Key topics such as early risk detection and financial resilience are often insufficiently addressed.
• Demand for precision: Many respondents call for clearer, more precise content and a stronger focus on decision-critical topics.
  
  

About the Survey

The CFA “Audit Quality” working group, led by Kirsten Baumbach, CFA, with support from Dr. Jacob Leidner, CFA, conducted the survey over a six-week period at the start of 2024. With 56 participants, the survey offers valuable insights into multiple stakeholder perspectives and outlines actionable strategies for improving corporate reporting standards.

About CFA Society Germany

With approximately 2,900 members, CFA Society Germany is the largest professional association for financial experts in Germany. As part of the global CFA Institute, the society is committed to promoting the highest standards in capital markets, corporate reporting, and ethical practices.

The full paper, “Survey on Audit Reports: Experiences from Analyses and Evaluation,” is available for download here.