Save content
Have you found this content useful? Use the button above to save it to your profile.
AIA

Praise and criticise, ICAS tells audit inspectors. By Dan Martin

by
25th Sep 2006
Save content
Have you found this content useful? Use the button above to save it to your profile.

Only publishing negative audit inspection reports could harm public confidence in individual audit firms and the wider auditing profession, the Institute of Chartered Accountants of Scotland (ICAS) has warned.

In its review of the audit market, the Financial Reporting Council's (FRC) Professional Oversight Board (POB) has said it favours the method of naming an audit firm in its annual Public Report where the board believes the firm has made insufficient progress in following Audit Inspection Unit recommendations (AIU) or has failed to cooperate with the AIU.

But responding to consultation on the issue, ICAS warned that because it is implied that only negative reports would be publicised, a one-off problem may be portrayed as a fundamental flaw with a given auditor damaging public confidence and the impact of choice in the UK audit market.

ICAS called for an annual POB report that discusses good practice as well as the negative points found during the monitoring process.

Norman Murray, ICAS president, said "The key to audit monitoring and, where necessary, improving audit practices, rests upon effective cooperation between the profession and the monitoring body.

"However, we believe that effective cooperation is unlikely to be enhanced by the threat of potential publication of negative AIU reports on individual firms. It is more likely to lead to defensive attitudes, potential litigation, and a focus upon maintaining a position rather than improving quality."

Tags:

Replies (1)

Please login or register to join the discussion.

avatar
By AnonymousUser
25th Sep 2006 17:39

POB Glasshouse
It would be constructive if POB could get the ICAEW to comply with its recomendations re: Regulation from February 2005, before further hounding the smaller Audit firms.

Jeff Lampert

Thanks (0)