Fears are growing that highly technical regulators are growing apart from the
practice profession at a local level, ignoring the judgments required to
undertake an audit.
Separately, the Society of
Professional Accountants is reporting an increase in the number of firms
failing to meet with the required levels of compliance.
One senior member of the profession said this week that the
assurance directorate bodies were getting too technical in their reviews of
‘They [those who have passed the assurance visits] are not given positive
reviews unless they are so technically competent that they speak in a technical
way all the time. There’s a difference between being technically competent and
knowing what the standards say and being able to apply them. But applying the
rules requires judgment.
‘But they [the QAD inspectors] just talk in the standards… if you can’t reply
in a similar vein, they think you’re an idiot.
‘Perhaps this is why people are no longer enjoying audits at smaller firms.
But we still need a balance between small and large firms,’ he added.
Oversight Board (POB) reported a rapid decline in the number of registered
audit firms in its 2007 trends report.
According to the report, the number of registered firms stood at 8,574 in
2007 – down by 23.5% from 11,211 firms in 2002.
Peter Mitchell, chairman of the SPA, warned members of the possibilities of
adverse practice assurance visits. ‘We are hearing from some SPA
audit-registered members that the review of their audit files
during practice assurance visits highlighted failures to meet the levels of
compliance now expected. Various areas of an audit were found wanting,’ Mitchell
The SPA urged its members to use a training organisation, to ‘cold file
The ICAEW declined to comment.
UK senior partner Phil Verity has been elected for a second term at Mazars
An audit partner has been appointed at Grant Thornton in its North West offices
KPMG has been appointed with “immediate” effect as the auditor of Dorcaster
The audit for Ibstock will be taken over by Deloitte following a competitive tender process