FRC publishes inspection findings for the Tier 2 and 3 audit firms
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Published: 16 December 2024
The Financial Reporting Council (FRC) has today published its annual inspection findings for Tier 2 and Tier 3 audit firms, which emphasises the importance of delivering consistent levels of audit quality.
The report highlights areas where firms have made progress but also identifies challenges that exist across this part of the market in achieving consistent audit quality, particularly in the Public Interest Entity (PIE) sector.
As noted in the report, while some inspection results demonstrated audits assessed as good or limited improvements required, there remains a disparity across some of the firms. This reflects the ongoing need for firms to embed effective systems of quality management and strengthen their commitment to continuous audit quality improvement.
Sarah Rapson, FRC Executive Director of Supervision"Trust and confidence in corporate disclosures through audits is fundamental to helping businesses attract capital and grow, and while the firms’ are committed to improving audit quality, the pace remains disappointingly slow. The FRC are enhancing our supervisory efforts to drive measurable progress and ensure audit quality meets the public and market's expectations."
"For Tier 2 firms, this means more targeted oversight, and for Tier 3 firms, the FRC is committed to minimising unnecessary burdens while ensuring our regulatory approach supports tangible improvements in audit quality to support UK businesses access capital and realises their growth ambitions."