UK Audits Have Improved – FRC

The number of audits considered good or requiring limited improvement has improved on the previous two years, according to a report by the UK’s Financial Reporting Council (FRC). The report summarises the FRC’s annual inspection and supervision results of the seven largest audit firms, including PwC and KPMG. Seventy-five percent of all audits inspected were considered good, compared to 71% in 2021 and 67% in 2020. However, inspection results at Mazars and BDO remain “unacceptable”, FRC said, noting that four of the eight audits reviewed at Mazars and five of the 12 reviewed at BDO required more than limited improvements. FRC CEO Sir John Thompson, said: “While it is encouraging to see some improvement in audit quality quality at the largest audit firms, consistent, long-term improvement is still required across the market. We will monitor closely the potentially negative impact on the public interest that the de-risking by firms of challenging audits may have on audit quality.”

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