EY has been criticised over its audit of revenue but the UK accounting watchdog has found that the overall quality of work improved.
In its annual inspection of the firm’s audit offering, the FRC found that eight of the 16 audits it reviewed were performed to a good standard with limited improvements required and six audits requiring improvements. Two audits required significant improvements.
Serious failings were found in in relation to evidence obtained from other group auditors, the quality of the audit work performed and evidenced on certain key judgements. The FRC also raised concerns over the audit of revenue, impairment and journals.
In one audit, the FRC discovered weaknesses in the application of substantive analytical procedures in three audits, including a lack of adequate corroboration of management explanations and a failure to set expectations either at all or with sufficient precision.
“We are pleased that the FRC has recognised the steps EY has already taken to improve audit quality and the considerable emphasis we place on our systems of quality control. We also recognise that maintaining our independence is fundamental to confidence in the quality of our audits. We are increasing the size of our independence function and strengthening our practices,” EY said.
Internal auditors are earn more than external consulting auditors, analysis by salary-bench marking site Emolument.com has found
ICAS and the FRC have called for action to prevent a potential audit skills gap in the future, with the launch of a new report
BDO has announced two key international appointments as the firm continues to expand in its private client business across the BDO global network
Online accountancy firm, My Accountant Friend (MAF), has opened its latest office in Birmingham and recruited new partner, Richard Ingledew