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FRC publishes audit quality inspection reports of the major audit firms

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11 Jul 2019

The Financial Reporting Council (FRC) has published individual audit quality inspection reports for the major audit firms.

The results highlight that 75% (73% in 2017/18) of FTSE 350 audits reviewed were assessed as “good” or “requiring limited improvements”. No firms achieved the FRC’s audit quality target for 90% of FTSE 350 audits to have “no more than limited improvements” by 2018/19.  For 2019/20, the FRC will extend the 90% quality target for FTSDE 350 audits to all audits inspected.  It has also indicated that it will set a new target for audit firms that from 2020/21 onwards, 100% of audits inspected should require no more than limited improvement. 

The FRC indicates that "overall, there has been no improvement on last year" and highlights that 25% of assessed audits were "below an acceptable standard".

The reports set out the principal findings arising from the audit quality inspection work carried out by the FRC’s Audit Quality Review (AQR) team for 2018/19. 

The reports focus on the key findings from the reviews, why such findings are important and actions the individual firms are taking to address them in order to safeguard and enhance audit quality.

The press release and links to individual reports are available on the FRC website.

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