The Audit Inspection Unit delivers its reports on the audit market generally, the Big Four and mid-tier firms
Audit inspectors have warned of severe risk if auditors continue to make cuts in their audit work, as a result of pressures to reduce their fees. In the latest Audit Quality Inspection report, the AIU – the Financial Reporting Council’s inspection arm - also found troubling problems with auditors not fully understanding the accounting and reporting requirements in the area of goodwill and intangibles.
The AIU’s director of auditing, Paul George warned: ‘In the context of group audits we have seen instances where materiality applicable to business components has been increased and the number of business components subject to full audit procedures reduced. These factors have caused us to have concerns about the sufficiency of work performed.’
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