The FRC has published its annual inspection and supervision results of the largest audit firms (BDO, Deloitte, EY, Grant Thornton, KPMG, Mazars and PwC).
Overall, 77% of audits inspected were deemed good or required limited improvement. This, says the FRC reflects a year-on-year improvement spanning four years, with a 10% increase compared to the 67% recorded in 2020.
That still leaves nearly one in four (23%) of inspected audits that require significant improvements!
Five of the largest firms had no audits requiring significant improvements and the overall number of such audits has reduced from 7% in 2021/22 to 3% of audits inspected this year.
FRC felt it was encouraging to see Mazars and BDO both showing signs of improvement following initiatives and actions put in place to raise their audit quality. BDO’s audit inspections revealed that 69% of audits were considered good or requiring only limited improvement, a notable increase from the previous year’s 58%. Similarly, Mazars saw an improvement, with 56% of their audits meeting the desired standards, up from 50% previously.
However, the FRC is disappointed with the overall results and lack of progress in some areas. There remains work to be done as they continue to fall below the standard of their peers.