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FRC publishes the results of major local audit inspections

  • FRC Image

02 Nov 2021

The Financial Report­ing Council (FRC) has published its inspection findings into the quality of major local body audits in England for the year ended 31 March 2020. This included larger health and local government bodies.

The FRC re­viewed 20 audits across six out of the seven largest audit firms cov­er­ing both the fin­an­cial state­ment opinion and the Value for Money ar­range­ments con­clu­sion work. The report focuses on the key areas requiring action across the firms, in relation to major local audits, to safeguard and enhance audit quality.

The FRC in­dic­ated that the results of its in­spec­tions were improved from the prior year inspection result with 30% (down from 60% in the prior year where those audits required either improvements or significant improvements) of the audits re­quir­ed im­prove­ment. The key areas identified by the inspection requiring action by some of the audit firms include:

  • strengthening the audit testing of expenditure;
  • improving the evaluation and challenge of assumptions used in concluding over investment property valuations;
  • improving the evaluation of assumptions used in property, plant and equipment valuations; and
  • providing improved rationale supporting a modified audit opinion.

With regards to Value for Money (VfM) arrangement con­clu­sions, all 15 reviews were as­sessed as requiring no more than limited improvements.

A press release and the full report is avail­able on the FRC website.

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