Regulator fears small auditors over-reaching their ability

Smaller firms are accepting audit work without the resources needed to carry
them out, the UK’s reporting regulator has warned.

Yesterday’s Audit Inspection Unit report found a higher proportion of audits
conducted by smaller firms required significant improvement.

Six of the 11 smaller firm audits reviewed in 2009/10 needed significant
improvement, according to the AIU, which is asking smaller firms to think twice
before taking on large audit jobs.

“Firms should not undertake audits unless they have the appropriate level of
resources and expertise to ensure they are performed to an acceptable standard,”
the body said.

The AIU is now considering new competency requirements for auditors of
listed and major public interest companies.

Further Reading:

Inspectors
call for ‘significant improvement’ in major audits

Rentokil-style
audit gains in popularity across listed companies