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Best results yet for the largest audit firms but still room for higher quality across all audit firms, ICAEW finds

Author: ICAEW

Published: 16 Nov 2023

Some 95% of non-Public Interest Entity audits reviewed at the largest seven firms in 2022/2023 were rated ‘good’ or ‘generally acceptable’, ICAEW’s Professional Standards Department’s annual Audit Monitoring Report, published today (Thursday 16 November 2023), has found.

It is the best performance recorded by those firms in inspections by ICAEW’s Quality Assurance Department.

The report recorded a slight dip in the overall quality of audits reviewed in 2022/23 across all firms compared to the previous year, but noted that the population of firms reviewed was very different. ICAEW said it was too early to determine whether this year’s drop in average audit quality would develop into a longer-term concern.

It encouraged firms to use their significant investment to implement ISQM quality management policies and procedures, particularly in respect of monitoring and remediation. 

Areas for improvement

Reviewers continued to identify common issues across audits, ICAEW said. The more challenging elements of audits – such as groups, stock, valuations and revenue – were key drivers where improvement or significant improvement was required. ICAEW also identified a lack of technical knowledge, flawed audit testing and inadequate reviews by managers or partners, so coaching and training at audit firms should remain an important priority.

Rama Krishnan, the Chair of ICAEW’s Audit Registration Committee, said:

“We were very pleased to see that 95% of non-PIE audits at the biggest firms were good or generally acceptable. This is the best set of results we have seen for these firms and highlights the investments they have made.

“While it was disappointing to see a slight drop in the results across all firms, overall audit quality remains good.

“ICAEW will continue to work with all of our firms to identify the key drivers where audits require improvements and encourage them to conduct root cause analysis to deliver progress.”


Notes to editors:

Contact: ICAEW media office, ruth.pott-negrine@icaew.com or 07557 161315

  1. ICAEW is the largest Recognised Supervisory Body and registers 2,200 audit firms ranging from the Big 4 accountancy firms to sole practitioners.
  2. ICAEW conducted reviews at 496 audit firms between April 2022 and March 2023 whose results were aggregated to produce the average results in the report.
  3. As a result of a requirement of the Companies Act 2006, ICAEW is under an obligation to carry out a review of audit quality at all audit registered firms at least once every six years with only the largest firms being reviewed every year. Over 95% of the firms reviewed in 2022/2023 will therefore be different to those reviewed in 2021/2022 which means year on year comparisons of average grades have limited value for that population.