Letter to audit firms on high quality audits
News types: Generic Announcement
Published: 18 December 2019
This letter was sent to the heads of audit of the larger audit firms in early November.
It was intended to share experience from the FRC's audit quality review (AQR inspections), and root cause analysis performed by audit firms on aspects of the audit process that are likely to affect the quality of audits.
The letter noted that the main recurring findings of AQR inspections have related to the challenge of management. It also commented on specific considerations for high-risk audits, where the FRC has seen an unsatisfactory level of lower graded reviews in practice.
The FRC encourages the audit firms to consider the contents of the letter and whether any of their firmwide procedures need enhancing accordingly.
It was intended to share experience from the FRC's audit quality review (AQR inspections), and root cause analysis performed by audit firms on aspects of the audit process that are likely to affect the quality of audits.
The letter noted that the main recurring findings of AQR inspections have related to the challenge of management. It also commented on specific considerations for high-risk audits, where the FRC has seen an unsatisfactory level of lower graded reviews in practice.
The FRC encourages the audit firms to consider the contents of the letter and whether any of their firmwide procedures need enhancing accordingly.