PURPOSE OF THE STUDY

The issue of audit quality currently sits at the top of the financial reporting policy agenda (eg, FRC, 2006a; 2007, 2008). The audit process involves interactions (ie, discussions and negotiations) between the audit team and client company directors and staff. At senior level, these interactions determine the content of the published financial statements and hence impact on the overall integrity of the financial reporting process and capital market confidence. This briefing reports findings from a survey of the three principal parties (finance directors/chief financial officers (CFOs), audit partners (APs) and audit committee chairs (ACCs)), part of which explores their role in the audit interaction process. The data was collected between June and September 2007 and therefore relates to the current UK regulatory environment. In this briefing we report on the extent, nature and outcomes of financial reporting interactions which took place involving the three parties. BACKGROUND In 1995, we undertook a similar investigation sending a questionnaire to CFOs and APs of UK listed companies (Beattie, Fearnley and Brandt, 2000). The auditing and financial reporting environment has changed radically since then. The failure of Enron in the US in 2001 was a major shock an