The AIU published its in-depth reviews on the seven biggest UK firms for the
first time this week.
The AIU, part of the
Board within the Financial
Reporting Council, said that the audit firms’ practices were generally
acceptable, but the reports also highlighted a series of flaws.
In its response to the review, E&Y said that it hoped the criteria on
which auditors are judged in public reports would ‘develop over time’. It said
it would ‘continue to work closely’ with the AIU.
AIU director Andrew Jones said most of the feedback from firms reviewed had
been positive, adding: ‘We do develop the work we undertake and our processes
each year but we are consistent in our approach between firms’
In the report on Ernst & Young ,the AIU said that its audit services were
‘generally good or acceptable’ but added that there was room for improvement in
areas including the independence of some non-audit services and risk assessment.
The AIU criticised a number of E&Y audits for failing to show enough
evidence that it was
meeting standards on independence of audit and advice services.
‘We considered there was insufficient evidence on file for one of the audits
we reviewed to demonstrate that proper consideration had been given to the
possible threats to the firm’s independence and objectivity arising from a tax
audit partner who also provided tax advice to his audit client,’ it said.
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