In last week’s blog ‘SME Audits Need to Improve’ we highlighted a recent report by the Financial Reporting Council (FRC) in the UK about their audit inspection findings for the year ended 31 March 2023. We continue with extracts from the report below.
Going concern was described as ‘an area of particular concern to audit firms’ by the FRC and it resulted in worse findings by 1% compared to the previous review.
Key findings of the review were:
- going concern included insufficient procedures to test cash flow forecasts;
- inadequate procedures to elevate the impact of loan covenants;
- insufficient procedures to assess the financing of debt; and
- There were ‘shortcomings in the reviews of audit work performed by engagement partners and/or engagement quality control reviewer’.
Other areas that led to such a high number of audits needing significant
- Revenue accuracy; and
- material accounting errors during an
Improvements recommended by the Financial Reporting Council include investment in:
- audit methodology;
- human resources,
- audit quality functions; and
- learning from mistakes made throughout their current auditing processes.
Please also go to our website www.jmcc.ie/training to see our latest:
- Latest updated AML for Accountants webinar (December 2023) which explains the current legal AML reporting position for accountancy firms and includes a quiz. Upon completion, you receive a CPD Certificate of attendance in your inbox. A 20% discount is available for orders of five or more webinars/products, if bought together.
- There are other accounting/audit webinars on the site and more will follow throughout 2024.
- Anti-Money Laundering Policies Controls & Procedures Manual (March 2022) – View the Table of Contents click here.
- letters of engagement and similar templates. Please visit our site here where immediate downloads are available in Word format. A bulk discount is available for orders of five or more items if bought together.
- ISQM TOOLKIT – We can also tailor ISQM training and brainstorming sessions to suit your firm’s unique requirements. The ISQM TOOLKIT 2022 is available to purchase here.