Released 18 November 2021
The Financial Reporting Council (FRC) has published Developments in Audit 2021, which sets out the FRC’s annual assessment of UK audit and ongoing expectations for how audit firms should deliver audit quality improvements in order to create a more effective audit market in the public interest.
The report highlights professional scepticism and challenge of management as the two key areas where deficiencies continue, and improvement is still needed.
FRC found examples of good practice including:
•the use of internal and external specialists to challenge management’s assumptions;
•the delaying of audit opinion sign-offs to ensure sufficient time was available; and
•the robust challenge of the competent auditor’s work by group auditors.
In the report, the FRC also includes an overview of its supervisory work, audit market trends and new UK auditing standards, including the auditor’s responsibilities relating to fraud, which are designed to further improve assurance for users of financial statements.
Further details can be found at https://www.frc.org.uk/news/november-2021/frc-publishes-latest-edition-of-developments-in-au.