Quality assurance monitoring of ICAEW audit firms
Quality Assurance monitoring
We are the largest recognised supervisory body in the UK, with around 2,300 firms registered for audit. Our philosophy is to be a robust, proportionate, and transparent regulator. At the same time, we offer help and support to our firms where appropriate. Further information about our audit monitoring visit process is available below.
Our approach to audit monitoring
We conduct monitoring visits to firms registered for audit with ICAEW. As well as our important role of protecting the public interest, we recognise the challenges that firms face and understand you may sometimes need help. We believe we are successful in fulfilling both objectives.
We have an experienced team of reviewers, who are all chartered accountants. As well as keeping up to date with the latest technical developments and interpretations of standards, we provide regular training to all our reviewers to continue to embed our philosophy to be proportionate and focus on the most significant aspects of the audit, and to help to ensure a consistent approach across our team.
Risk alert for new audit tenders
As ICAEW registered auditors will be aware, in response to changes in the audit market, the growth of challenger firms and some more complex audits moving away from the largest audit firms, we have increased our activities to monitor the audits undertaken across firms registered for audit with ICAEW. Our monitoring of auditor cessations and other recent intelligence information shows that there are significant numbers of UK companies seeking new auditors.
Find out more about changes to our monitoring activity and our recommendations during this period of high demand.
Your audit monitoring visit
During your visit, we will review and assess your firm’s procedures, processes and controls to make sure:
- audits comply with professional standards; and
- your firm meets the requirements of the audit regulations.
We use a risk-based approach to selecting the dates for firm visits. This is in line with the Audit Regulation & Directive regime and the requirements of our oversight body, the FRC. There are various factors which determine the risk profile of your firm and therefore your next visit date. These include:
- the size and complexity of the firm;
- its RSB-scope audit clients; and
- previous regulatory history.
You may have your next visit on or just before the six-year anniversary of your previous visit, or we may need to visit more frequently due to your risk profile. We will continue to notify you when we select you for a visit.
Usually, we carry out our audit visits separately from visits for Practice Assurance, DPB (Investment Business) and probate. However, in some cases, it's more practical to cover more than one area.
The monitoring process if your firm carries out PIE audits
Since 17 June 2016, any firm which audits at least one PIE (a fully listed company, bank, or an insurance provider) is monitored by the FRC. The FRC also monitors audits of AIM quoted entities with market capitalisation over €200m (average over 3 years) and Lloyd’s syndicates.
These together with PIEs are called retained audits. Audit Quality Review (AQR) visits will cover the whole firm and overall quality control procedures and review of a sample of PIE/retained audits. The FRC will advise firms when a visit is due to take place.
We will continue to visit your firm if you have PIEs or other retained audits to review all other audit work. We may need to review some aspects of your whole-firm procedures to complete our visits.
The visit process
|Our risk-based framework – visit cycles||
|Scope of our visits – summary||
|Assessing whole-firm procedures||
|Review of audit files||
|Concluding and reporting||
Audit Monitoring Reports
Every year our Quality Assurance team (QAD) looks back at the results of the last 12 months of audit monitoring reviews, covering the Big 4 to sole practitioners, and identifies areas for improvement and examples of good practice. We recommend you familiarise yourself with our latest report to help you stay up to date with best practice advice and current common issues.
Support for ICAEW audit firms
We offer practical audit support and guidance to ICAEW auditors including the latest regulatory updates in Audit News, reports and webinars to help your firm prepare your next audit monitoring visit.