The Financial Reporting Council (FRC) on Tuesday released its latest audit inspection results at the seven largest UK accounting firms which show “one third of audits requiring more than limited improvements.”
The FRC’s Audit Quality Review (AQR) reviewed 88 audits conducted by KPMG, Deloitte, PWC, EY, Grant Thornton, BDO and Mazars and concluded “only two thirds of the audits were of a good standard or required limited improvement.”
In the reports, the FRC sets out “a number of significant steps that it is taking or intends to take in the short to medium term to ensure that the audit firms take swift actions to respond robustly to our concerns.”
FRC’s Executive Director of Supervision, David Rule said: “We are concerned that firms are still not consistently achieving the necessary level of audit quality.
“While firms have made some improvements and we have observed instances of good practice, it is clear that further progress is required.
“The tone from the top at the firms needs to support a culture of challenge and to back auditors making tough decisions.”