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.