Big four auditors fail to meet UK regulators’ expectations

Britain’s accounting regulator said audits by the Big Four accounting firms and smaller rivals had fallen short of expectations, raising troubling questions about the financial statements investors rely on.

The Financial Reporting Council, which oversees the UK branches of international audit firms, said the performance of Deloitte LLP, Ernst & Young LLP, Grant Thornton UK LLP and PricewaterhouseCoopers LLP improved from the previous year but remained below expectations, with around 80% of audits rated as good or requiring only limited improvement.

“The number of audits that we have assessed as needing improvement remains unacceptably high,” said the Financial Reporting Council. Each year, the regulator inspects a sample of individual audits to assess their quality. He focuses on what he calls high-risk audits, such as companies in financial difficulty or where the auditor has identified governance weaknesses.

The Financial Reporting Council said KPMG LLP’s performance was unacceptable. Of KPMG’s audits, only 59% were rated as good or required only limited improvement.

“The overall inspection results at KPMG have not improved and it is unacceptable that for the third year in a row we have found that improvements are needed for KPMG bank audits,” the Financial Reporting Council said in Friday. a report on the inspections carried out during the 12 months up to the end of March.

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