PracticeAccounting FirmsPKF receives mixed review from audit watchdog

PKF receives mixed review from audit watchdog

PKF becomes the latest firm to have the Audit Inspection Unit's tough examination of its work made public

The audit watchdog has given a mixed review into PKF’s audit work.

The AIU reviewed seven of PKF’s audits, recognising the emphasis placed on

our overall systems of quality control.

Three audits were performed to a “good standard”, while two were rated as ”
acceptable” standard, but with improvements required.

However two audits, neither of which were for companies in the FTSE 350,

required “significant improvements”, the AIU said.

The watchdog assesses audits as requiring significant improvement if it
harbours concerns about the sufficiency or quality of audit evidence or the

appropriateness of judgments in relation to key aspects of an audit, either

individually or collectively – or alternatively very significant concerns in

relation to other aspects of an audit.

One significant improvement was in relation to the audit of a key
provision.The other related to the sufficiency of audit evidence obtained in
respect of
inventory and revenue, the AIU said. Its assessments did not necessarily imply
that an inappropriate audit opinion was issued.

The
publication of the PKF report brings the Audit Inspection Unit’s tough
examination of UK firms to a close for 2010.

PKF has taken a number of positive steps to deal with matters raised in
previous inspections, the watchdog added.

However, the reviews of audit engagements have continued to identify some
audit areas where insufficient audit evidence was obtained.

“We expect the firm to take further action to deal effectively with these
matters,” the AIU said.

PKF said in response: “We welcome the publication of this report on our firm
and its recognition of the emphasis we place on our overall systems of quality
control.

“Best auditing professional practice is constantly developing and
consequently continuous improvement is necessary on our part.

“In this context we are pleased that the AIU has confirmed that we have taken

actions intended to address all the findings from its previous review.

“We also re-affirm our commitment to implementing all the recommendations in
this report as part of our programme of continuous development.”

Further reading:

Watchdog
reveals scathing report of smaller audit firms

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