FRC publishes report on quality of major local audits ahead of system reset
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Published: 19 November 2024
The Financial Reporting Council (FRC) has today published its annual report on the quality of major local audits, which also sets out how it will continue to support the local audit system to recover from delays in the publication of audited accounts.
The report follows the Government’s legislative measures in September 2024 to clear the backlog in local audit and rebuild assurance through a series of statutory backstop dates.
The FRC inspected 8 audits this year – 6 NHS and 2 local government. The proportion of audits within each category reflects a wide range of factors including our commitment not to perform further inspections of routine local government audits for financial years up to and including 2022/23, unless there was a clear case in the public interest to do so.
As part of the FRC’s approach to supporting the local audit system to recover, the report confirms that this commitment will be extended to 2023/24 audits. This decision will allow staff and partners at audit firms to focus on completing as much outstanding work as possible.
Sarah Rapson, Executive Director of Supervision, said:
“Local auditors play a vital role in their communities by identifying critical issues such as leadership, governance, or cultural failures and recommending improvements.
With measures now in place to address the backlog of local audits and rebuild assurance, the FRC’s approach to supervision will continue to lean towards supporting the system to recover timeliness and maintain high standards of audit quality and public accountability.”