Nearly a third of UK audits completed by small and mid-tier firms need ‘significant improvements’ after inspections by the Financial Reporting Council (FRC). The inspections were carried out for the year ended 31 March 2023 on 32 firms in total and reported by the Financial Reporting Council in late 2023.

These inspection results will be influential for Irish regulators like the Chartered Accountants Ireland, the CPA Ireland, the ACCA as well as the Irish Audit & Accounting Supervisory Authority when carrying out their inspections of Irish audit firms in 2024.

The Financial Reporting Council say that ‘disappointingly, many of our findings were in routine areas, such as

  • the audit of journal entries;
  • complying with archiving requirements;
  • the audit of judgments and estimates (17% worse than in the previous report), and
  • the audit of going concern.

Audit teams need to demonstrate a greater effort at robust professional scepticism when it comes to both the audit of judgments and estimates, and going concern.

The FRC also suggested audit teams refer to the FRC paper, What Makes a Good Audit.

We will continue with Part Two of this blog next week.

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