DHG Board Report: UK's Financial Reporting Council Releases Audit Quality Report

The Financial Reporting Council recently released the Audit Committee Chairs’ (ACCs') views on and approach to, audit quality. The Financial Reporting Council (FRC) sets the UK Corporate Governance and UK Stewardship Codes; sets UK standards for accounting and actuarial work; monitors and takes action to promote the quality of corporate reporting; and operates independent enforcement arrangements for accountants and actuaries. As the competent authority for audit in the UK the FRC sets auditing and ethical standards and monitors and enforces audit quality.

The FRC commissioned YouGov to deliver 50 interviews with ACCs of Public Interest Entities (PIEs) to explore ACCs’ views on, and approach to, audit quality. The FRC was seeking a more detailed understanding of ACCs’ views to help inform its work to support Audit Committees in their role of driving high quality audits.

Some key findings include:

  • “…there could be inconsistencies in how they (ACCs) go about promoting audit quality. This lends weight to proposals for reforms in the audit sector, including the introduction for standards for audit committees."
  • “Some ACCs mentioned challenge and skepticism as the key to ensuring a high-quality audit, although these were not named as key attributes for a good auditor by all.”
  • “It was not always clear that ACCs distinguished between good quality service and a good quality audit.”

There are many other interesting findings in this report. If you have any questions or would like to speak to one of DHG’s professionals, please contact assurance@dhg.com.

ABOUT THE AUTHORS

Roy Strickland
Managing Partner, DHG Forensics & Valuation Services
Roy.Strickland@dhg.com
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