Annual audit quality inspection reports delayed
The Financial Reporting Council has confirmed that it will be delaying the release of the annual audit quality inspection reports until after the general election
17 May 2017
The audit regulator has decided to delay the release of the critical reports due to ‘purdah restrictions’, an FRC spokesperson told CCH Daily. It confirmed that the 2016/17 reports will be published by the end of June.
The annual audit quality inspection reports set out the key issues facing auditors, highlighting problems with audit quality and materiality; the indepth reports provide insight into the audit practices of the Big Four firms – PwC, Deloitte, EY and KPMG, and are a vital benchmark to ensure continuing improvement to audit.
This year has seen the FRC issue a number of substantial fines for poor audit performance and sub-standard work, with PwC receiving a record £5m fine for its audit of the now-defunct Connaught, a social housing provider which went into administration in 2010.
Also this April, Grant Thornton was handed a substantial fine of £2.3m over the AssetCo audit and was pulled up after an investigation identified a range of ‘widespread and significant’ failings in work on the audits of the fire and rescue services provider.
This year will also see an overhaul of the regulator’s disciplinary sanctions procedures and fine structure with an independent review headed by former Court of Appeal judge Sir Christopher Clarke. The review panel is currently conducting a public consultation into the effectiveness of the current sanctions process and whether there are grounds for increasing the scale of penalties to act as a deterrent for misconduct.
By Sara White