PracticeAuditAudits ‘not documented’ sufficiently says AIU

Audits 'not documented' sufficiently says AIU

Audit firms are failing to document their judgments well enough, the regulator has said.

The Audit Inspection Unit issued what is expected to be its last general
report on firms yesterday, reiterating concerns about the level of
documentation.

The AIU questioned the quality of documentation on file, which supported the
judgments made across all nine firms. The body said that while it had given
audit teams the benefit of the doubt, it had made clear that the deficiencies
need to be rectified.

The AIU also noted one instance in which a partner left a firm to join ‘a
major listed audit client’ as finance director. Though the body did not name the
person, Barclays’ new FD Chris Lucas is understood to be the individual
concerned.

Lucas had been the engagement partner on the Barclays audit at PwC, but left
a two year gap between stepping down and going to the bank, as is required under
conflict of interest rules. Despite the gap, the AIU said it was not clear if
the partner remained in the firm’s ‘chain of command’.

The firm explained why the partner was not in the ‘chain of command’, with
the AIU concluding that firms needed to clarify the ‘chain of command’ in a
firm.

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