The quality of Tier 2/3 audits fell from 76% to 71% scoring in the good or generally acceptable category, while 29% of inspected audits needed improvement or significant improvement, according to inspectors in the annual ICAEW quality audit review, which focused on 775 audit files in 496 audits.

By contrast, while the mid-tier sector performed worse than the previous year, the Tier 1, including the Big Four, improved their audit work, achieving 95% in the inspected audits, described as good or generally acceptable. This figure was not broken down to show what percentage of audits scored ‘good’, the highest rating.

The main problem areas in listed audit arose from group accounts and related audit work, stock and long-term contracts, valuation and revenue recognition.