（1999）Financial reporting on the Internet and the external audit.pdfVIP

The European Accounting Review 1999, 8:2, 335–350 Financial reporting on the Internet and the external audit Roger Debreceny Nanyang Technological University, Singapore Glen L. Gray California State University at Northridge ABSTRACT Electronic dissemination of nancial reports on the World Wide Web is becoming ubiquitous for larger corporations in developed market economies. This form of reporting presents many challenges for the nancial statement audit. It is critical that the audit profession proactively addresses those challenges or they will be certainly addressed by government regulatory bodies and the courts of law. Most large listed public companies in France, Germany and the UK provide electronic versions of their printed annual reports on the web. A survey was made of forty- ve large listed UK, French and German corporations. A total of thirty-six of these corporations published their annual nancial statements in HTML or Adobe Corporation’ s Acrobat. Ten of the seventeen corporations reporting in HTML included the auditors’ report on their website. None of these reports linked back to the auditors’ own site. A number of issues arise when corporations provide their nancial statement audits on the web. These issues include the ease with which the auditor’s report can be changed without any indication that a change was made; the meaning of the look and feel of the auditor’s report in a rapidly changing web environment; and the implications of hyperlinks to and from web- based auditors’ reports as well as the location and placement of the auditors’ reports. INTRODUCTION 1 This article analyses the audit implications for the electronic dissemination of nancial statement via the Internet. The Internet is radically changing the dissemination and use of