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ICAEW comment on DLUHC consultation on addressing local audit backlog in England

Author: ICAEW

Published: 09 Feb 2024

Alison Ring OBE FCA, ICAEW Public Sector Director, commented on the publication of the consultation and cross-system statement on proposals to clear the backlog of local audits in England:

“The growing crisis in auditing local authority financial statements has undermined trust in the numbers, at a time when councils are having to make tough choices based on financial information that has not been subject to the rigours of an external audit.

“Audited financial statements are critical to effective financial management in local authorities and how they are held to account, and we hope that as many local authorities as possible will be able to resolve accounting issues in time and publish audited financial statements with clean audit opinions. Some local authorities may receive a modified audit opinion, but on balance this is preferable to allowing the local financial reporting and audit crisis to continue to go unresolved. 

“This is a short-term measure to tackle the symptoms that have given rise to audit delays and is a first step to returning timely accountability to local authorities on a regular basis. However, it is essential that we also address the underlying issues facing local authority finance teams in preparing financial statements and the external auditors in auditing them. ICAEW has called for reform to make the accounts more understandable and used more effectively in holding local authorities to account, for investment in finance teams, better governance and improving accounting processes and controls, and for steps to expand capacity in the local audit market.”


Notes to editors:

CONTACT: ICAEW media office stephen.froome@icaew.com or 07970 402 073