While the quality of Big Four audit work has improved in the last year, the audit regulator is warning firms against complacency, and has heavily criticised BDO over failures to get to grips with endemic problems with audit work
There are also growing concerns about the lack of competition in the audit market, with a growing divide between the Big Four plus two Tier 1 Firms, which dominate the audit market, and the rest of the mid-tier firms which struggle to complete.
The Financial Reporting Council (FRC) warned that ‘although some non-Tier 1 firms demonstrate the ability to deliver high-quality audits, many still struggle to consistently meet adequate standards’.
In the latest round of FRC Audit Quality Inspection (AQI) reports for 2024-25, five of the largest UK audit firms scored 90% or more, and demonstrated overall improvements in the quality of their audit work with Forvis Mazars, in particular, turning around its audit team. Of the six firms inspected, BDO came in for heavy criticism from inspectors for a failure to address long-running and fundamental audit issues.
