FRC report: Audit quality thematic review
Released 06 December 2018
The Financial Reporting Council (FRC) has published a new report on a thematic review considering the auditors’ work on the ‘Other Information’ in the Annual Report.
The review focussed on those aspects of the ‘Other Information’ where the auditor has specific reporting responsibilities. The review found that auditors’ work on the information in the front end of company reports outside of the financial statements does not meet the requirements of Auditing Standards consistently. Inconsistency in the extent and quality of the work in part reflects the non-prescriptive requirements in the Audit Standards. Firms’ own guidance to their auditors also lacks prescription, which has led to varying approaches being taken to this work, even by different audit teams within the same firm. While the FRC identified instances of good practice in the audits that it reviewed, there were too many instances where insufficient work was performed to support the statements made by auditors in respect of the ‘Other Information’ in their audit reports.
For more information and to view the report, see Auditors must improve their work on the ‘front end’ of company reports.