Smaller audit firms still struggle with compliance
The ICAEW's Quality Assurance Directorate (QAD) visited over 1,000 registered audit firms in 2004. The majority visited were small firms, sole practitioners and firms with up to 10 partners. The issues noted by the QAD are the same ones that come up every year.
The most common issue was also the most fundamental - a failure to fully comply with Audit regulation 3.08a, 'Compliance with Auditing Standards'. In other words, many small firm audit files fail to properly support the audit report signed by the firm.