Baker Tilly criticised over deficient audit work

by Richard Crump

More from this author

22 Apr 2014

  • Comments

TOP TEN accountancy firm Baker Tilly has been told to review its audit methodology in light of continuing deficiencies in the quality of its audit work discovered as part of an inspection by the profession's watchdog.

Baker Tilly was also criticised by the FRC for its reluctance to accept recommendations made by the regulator, which found half of the audits it inspected required significant improvements and that progress in improving the quality of its work has been slower than expected.

The FRC found that of the six Baker Tilly audits it reviewed as part of its Audit Quality Inspection Report, three audits required significant improvements; one required some improvement, while two were performed to a good standard.

"We are concerned that, despite additional correspondence with the firm on the issues arising, the firm may not have accepted certain of our findings that led us to conclude that significant improvements are required," the FRC said.

According to the FRC, areas in need of improvement include the audit of impairments, the audit of IT controls, the consideration given to financial statement risk, the reporting of audit differences arising on the audit of the valuation of interest rate derivatives and the performance of substantive analytical review procedures.

As part of its findings the FRC told the firm to review its audit methodology in light of continued deficiencies in its analytical review process and to take more effective action in response to "internal and external audit quality monitoring findings".

"The firm's rate of progress in achieving improvements in audit quality, particularly in relation to substantive analytical review and the audit of IT systems, has been slower the we expected," the FRC said.

In response to the findings Baker Tilly said: "We are committed to achieving the highest standards of audit quality and we continue to take whatever actions are necessary to do this.

"We welcome the Audit Quality Review Team's report and we are already addressing all of the findings that will lead to an improvement in audit quality."

Visitor comments

blog comments powered by Disqus

Add your comment

We won't publish your address

By submitting a comment you agree to abide by our Terms & Conditions

Your comment will be moderated before publication

  • Send

Charterhouse Accountants

Finance Officer

Charterhouse Accountants, Beaconsfield, Permanent, Full Time, £ Competitive




Get the latest financial news sent directly to your inbox

  • Best Practice
  • Business
  • Daily Newsletter
  • Essentials


Search for jobs
Click to search our database of all the latest accountancy roles

Create a profile
Click to set up your profile and let the best recruiters find you

Jobs by email
Sign up to receive regular updates with the latest roles suitable for you



Why budgeting fails: One management system is not enough

If budgeting is to have any value at all, it needs a radical overhaul. In today's dynamic marketplace, budgeting can no longer serve as a company's only management system; it must integrate with and support dedicated strategy management systems, process improvement systems, and the like. In this paper, Professor Peter Horvath and Dr Ralf Sauter present what's wrong with the current approach to budgeting and how to fix it.


iXBRL: Taking stock. Looking forward

In this white paper CCH provide checklists to help accountants and finance professionals both in practice and in business examine these issues and make plans. Also includes a case study of a large commercial organisation working through the first year of mandatory iXBRL filing.