A summary of FRC's latest AQI reports includes, Big Four firms undermine value of audit, KPMG comes under fire over ‘unacceptable’ audit quality, Deloitte pulled up over component auditor work, EY bank audits criticised as score drops
Big Four firms undermine value of audit
One in four listed audits require improvements while the Big Four’s failure to challenge company managements about future forecasts and scrutinise financial decisions is undermining the value of audit, according to the latest 2017/18 Financial Reporting Council’s (FRC)Audit Quality Inspections (AQI).
In the FRC’s AQI report, 28% of Big Four audits were marked down as requiring improvements, with all Big Four firms performing much worse than the 2016/17 cycle when 19% of audits were pulled up for improvements. Out of 94 Big Four audits reviewed, 24 were singled out as requiring improvements with two further audits identified as requiring significant improvements. This is worse than last year when only 13 audits out of 90 required improvement, with a further two marked as requiring significant improvement.
