FRC issues thematic review on root cause analysis of audit inspection findings
16 Sep, 2016
The FRC has published a thematic review on the subject of root cause analysis performed by audit firms relating to audit inspection findings. This report is intended to promote continuous improvement in audit quality by providing insights into and aiding understanding of firms’ procedures, highlighting areas of good practice and providing recommendations based on these.
The FRC's review looked at the policies and procedures of the six largest UK audit firms. Overall, all are improving their processes for root cause analysis but some are more advance than others.
The FRC recommends that the firms should improve planning and training on the process, consider using individuals and techniques from outside the audit practice and adopt more consistent processes for investigating causes for internal and external inspections.
More details of the FRC's findings can be found in the full report, available from the FRC's website, along with a press release.