Watchdog finds big four auditor "generally acceptable"

The audit watch dog said it is “generally satisified” with big four auditor
PricewaterhouseCoopers (PwC), after inspecting a handful of the firm’s audits.

The world’s largest accountancy firm was among four to be inspected by the
Financial Reporting Council’s (FRC) audit inspection unit, which didn’t quite
give the firms a clean bill of health but expressed broad satisfaction with the
quality of audits.

PwC was joined mid tier firms Grant Thornton, Horwath Clark Whitehill along
with its big four rival KPMG in the inspection which was overall satisfied with
the audits.

In PwC’s case it found the that “audit procedures were generally performed to
a good or acceptable standard and, in relation to one listed entity, to a very
good standard”.

Internally, however, PwC has been providing incentives for staff to grow the
firm, which, the report warned, should not be done at the expense of audit
quality.

“Although there is no evidence to suggest that this has detracted from the
focus on audit quality, in our view it is important for the firm to send a
consistent message that achieving the other areas of the strategy is subject to
the overriding requirement of achieving quality audits,” the report said.

For KPMG, the report found a “good or acceptable standard” in most cases. It
did however highlight some improvements for the firm “including some matters
relating to performance evaluation procedures”.

Similar issues were identified with Horwath Clark Whitehill and Grant
Thornton, although the overall appraisal was generally upbeat.

Read the PwC report

Read
the KPMG report

Read the Grant Thornton report

Read
the Horwath Clark Whitehill report