A key part of our role as an improvement regulator is to provide help and support to our firms, ensuring you have the tools and resources to help your firm maintain the expected standards. Access our latest Audit Monitoring Report, a valuable resource for firms regulated by ICAEW for audit services.
In our latest report, we share some early feedback on ISQM1 implementation and insights and guidance on where firms can improve the quality of their audit work based on the findings of our Quality Assurance reviews during 2022/23, especially in light of the challenges firms have faced attracting and retaining staff post pandemic.
As in previous reports, Trevor Smith, Director, Quality Assurance Department (QAD), has identified the key drivers behind audits requiring improvement or significant improvement, and which are the more challenging aspects of audits such as groups, stock, valuations and revenue. It is important that firms focus on these key areas.
He points out how robust root cause analysis is important for drawing up action plans to fix issues and learn lessons for the future. Plus, he mentions the importance of ongoing education and development in improving audit quality to provide greater reassurance that all auditors retain, keep up to date and improve their knowledge and skills base.
Audit monitoring visits in 2022/23
The overall picture of audit quality from audit visits completed during 2022/23 shows that there is still room for improvement in the group of firms reviewed this year, despite good results from the largest audit firms.
We explored how proactive firms are using their system of quality management and root cause analysis to drive continuous improvement.
ICAEW as an improvement regulator
ICAEW plays a significant role monitoring the quality of non-public interest entity (PIE) audit work in the UK. As the largest UK recognised supervisory body, with responsibilities delegated by the Financial Reporting Council (FRC), the UK Competent Authority, ICAEW registers about 2,250 firms to conduct audit work.
Our philosophy is to be a robust, proportionate, and transparent regulator. At the same time, as an improvement regulator, we offer help and support to our firms where appropriate.
The percentage of good and generally acceptable audits increased significantly from 56% to 72% for FRC Tier 2 and 3 firms.