On the face of it, regulators can’t win. Politics demands that they are seen to be tough on those they regulate, while at the same time showing continuous improvement in the same people.

The Financial Reporting Council’s (FRC) Audit Quality Inspections Annual Report 2014/15 shows the highest level of ‘good’ and ‘limited improvements’ findings in the audits it has inspected ever, at nearly 67%, up from 48% five years ago. But it seems unlikely that this upward trajectory will continue at quite the same rate.

The accounting regulator is gaining more experience, it has more specialist expertise than it once did, the audits it inspects have a different focus every year and perhaps more importantly, expectations are changing. The FRC’s work isn’t going to be finished anytime soon.

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