The proportion of audits assessed as requiring no more than limited improvements was down 10% to 74%, with one audit requiring significant improvements, compared with none the previous year, according to the last round of audit quality inspections (AQI) by the Financial Reporting Council. Of the total of 19 audits inspected, one in four failed to meet the FRC’s expectations that only limited improvements were required. The audit which required significant improvements was not for a FTSE 350 company.

Last year’s AQI round showed that investment in audit quality and enhanced training seemed to be paying dividends at KPMG as the Big Four firm performed best in terms of overall quality of audits inspected during the AQI cycle, but this year’s drop in performance was a concern for the FRC.

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