The large amount of overtime worked by auditors was flagged as a significant barrier to entry to the profession in the latest audit quality inspection report by the Financial Reporting Council (FRC).

When FRC inspectors were doing their annual inspection round this year, they also reported back to the regulator on issues relating to resourcing levels and risk levels at the six firms inspected, as well as the corporate culture and barriers to entry.

It was clear from the experiences of inspectors that audit staff are under huge pressure at firms with long hours, excessive overtime and work pressure.

The FRC said there were ‘significant variations in the definition of “excessive overtime” between firms. This ranges from a few additional hours to almost doubling working hours per week.  

Inspectors found that many auditors felt ‘under unreasonable pressure and do not have sufficient time to undertake quality audits’.

The lack of a reasonable work/life balance continues to be the principal reason why people leave the audit profession.

The FRC also voiced concerns that ‘UK resource is increasingly drawn from a global pool both in terms of recruitment and the use of offshore delivery centres’.

The increasing use of offshore services to fulfil contracts has been flagged in previous year’s inspection cycles, but FRC stressed that ‘firms must ensure that, where appropriate, processes and initiatives are adjusted to address the impact of this, for example, differences in experience’.

There are also real concerns about the ability to hire sufficient staff in the future to ensure a pipeline of qualified auditors.

The auditing profession worldwide faces ongoing capacity challenges and recent years have seen declines in the number of audit firms registered with the Recognised Supervisory Bodies.

The number of students joining UK accounting bodies has also plateaued in recent years, adding to the challenges of maintaining audit capacity.

The FRC said: ‘The future of the profession also faces challenges from the varying expectations of a multi-generational workforce. We expect audit firms to prioritise strategies that better support their staff in maintaining a healthy work-life balance, while enabling a mindset of professional scepticism and challenge supported by high quality training and resources.’

Recruiting and retaining adequately skilled staff was cited by smaller firms as a significant market barrier preventing them from growing their audit business.

The FRC called on the professional accountancy bodies like ICAEW, ICAS and ACCA to ‘play a key role in addressing the capacity challenges present at all levels of the audit market’.

‘Ensuring that the audit profession remains viable, both now and in the future, is essential for meeting the industry's resourcing challenges and is a key aspect of responsible audit firm leadership,’ the FRC added.