AQI 2015: EY rapped for breaches of ethical standards, lack of oversight

29 May 2015

Continuing breaches of ethical standards and a lack of oversight by audit partners continues to be a problem in audit work conducted at Ernst & Young, with two audits singled out as in need of significant improvement in the latest Financial Reporting Council’s (FRC) audit quality inspection (AQI) report into 16 audits performed by the firm, reports Sara White

The latest audit inspection cycle has raised a number of issues around auditor independence, standards of oversight, training and potential areas of conflict, exacerbated by a lack of effective monitoring over the 12-month inspection period.

The FRC reviewed and assessed the quality of selected aspects of 16 audits (2013/14: 16 audits), of which one (2013/14: none) was a further review of an audit reviewed in our last inspection which included an assessment of how findings previously raised had been addressed.

Eight of the audits reviewed were performed to a good standard with limited improvements required and six audits required improvements.