FRC wants a quality Christmas

Not so at the Financial Reporting Council, the serious and austere regulator
of the UK accounting profession.

The watchdog has just launched a discussion paper entitled Promoting Audit
Quality.

There have been concerns from investors that audit reports are merely
compliance documents driven by standard-setters and not driven by business and
investor needs.

The paper acknowledges the growing body of commentators who have begun to
interrogate whether audit reports fulfil their function.

But the FRC insists that given recent extensive changes – such as the
introduction of IFRS – fundamental reviews of the financial reporting regime
ought to take place after all the changes have been fully assimilated.

The FRC has presented skills, training and appraisal as the drivers of audit
quality.

The threats, according to the FRC, are also largely personnel issues,
including the failure to develop personal characteristics through effective
monitoring; failure to retain staff with the necessary experience and expertise;
allocating more capable staff on the basis of client prestige rather than audit
risk and insufficient or ineffective training.