Audit monitoring report 2020/21
A key part of our role as an improvement regulator is to provide help and support to our firms; to ensure you have the tools and resources to help your firm maintain the expected standards. The Audit Monitoring Report is an important resource for firms regulated by ICAEW for audit services.
In this new two-part report, we highlight how firms can improve the quality of their audit work based on the findings of our Quality Assurance reviews during 2020/21;
The report identified three areas where audits could be improved: evidence; documentation; and identification and assessment of risk.
In order to address these common weaknesses on audits, firms need to understand why the weaknesses occur. In this report, we examine the information shared with us by firms on the root causes of issues we identified during file reviews. It also includes case studies to help firms learn from this best practice.
Share the report with your teams and use it to help maintain and focus on continuous quality improvements for audit work.
You can find a comprehensive list of ICAEW audit resources at the back of the report including details of the ICAEW training films, False Assurance and Without Question that bring to life some of the areas that are highlighted as requiring improvement.
Our regulatory role: Audit
ICAEW is the largest Recognised Supervisory Body in the UK. We regulate around 2,500 firms for audit, from the Big Four to sole practitioners. The firms regulated by ICAEW are subject to monitoring by Quality Assurance Department (QAD). The work of QAD is overseen by the independent ICAEW Regulatory Board and the Financial Reporting Council. Firms that are found to have carried out poor quality audit work are reported to the Audit Registration Committee (ARC), an independent committee, consisting of an equal number of ICAEW member volunteers and lay representatives with a lay Chair. The ARC ultimately takes decisions on whether firms referred to it by the QAD should retain their registrations. A registration is a licence (permission) to carry out audit work.
Yearly, we report publicly on the findings of our monitoring activity across the regulated areas we regulate firms and individuals for.