FRC publishes annual audit quality inspection results 2021/22
22 Jul, 2022
The Financial Reporting Council (FRC) has published its annual inspection and supervision results of the largest audit firms. The results indicate that audit quality continues to improve at the largest audit firms and on the largest audits but that more improvement is needed to deliver consistent audit quality.
The results highlight that the number of audits considered good or requiring limited improvement has improved over the previous two years. Of the 96 audits inspected, 75% were categorised as good or requiring limited improvements (71% in last year’s public reports and 67% in 2020/21).
For the FTSE 100, 93% were categorised as requiring no more than limited improvements compared with 75% in 2020/21 and 64% in 2019/20. For the FTSE 350 88% achieved this standard compared with 77% in 2020/21 and 71% in 20219/20 and for the FTSE 250 the figure was 85% (78% in 2020/21 and 74% in 2019/20).
Despite the improvements made the FRC highlights that improvements are still required to meet the demands of the market. The report highlights that common inspection findings related to areas such as estimates, impairment and revenue with good practices identified for areas such as group audits, fraud risk and climate risk.
The press release and links to individual reports are available on the FRC website.
