LONDON, March 2 About one third of audits of
London-listed companies sampled by Britain's accounting
regulator lack rigour and need improvements, the watchdog said
in a report published on Thursday.
The report came after recent accounting scandals at British
blue-chips BT and Tesco, which wiped billions of
pounds off share prices.
The Financial Reporting Council (FRC), publishing the
findings of its latest review of control processes, said all
auditors had procedures and dedicated resources for ensuring
audit quality and some went beyond those required by standards.
"However, the number of audits that required more than just
limited improvements shows the firms' audit quality procedures
were not sufficiently robust," it said.
The "Big Four" global accounting giants Deloitte, PwC, KPMG
and Ernst & Young, which offer services to companies ranging
from auditing to consultancy, operate in Britain with Thornton,
BDO and RSM Tenon among their smaller rivals.
The FRC, which said it had reviewed six of the largest
accounting firms and selected 26 recent audits of London-listed
companies, did not name auditors and none was referred to its
However, it urged auditors to do more to engage specialists
in their audits and improve basic quality control procedures,
adding that strong leadership and "the right culture" would lead
to faster improvements and greater quality consistency.
Its next "thematic review" of 2017/2018, part of the
watchdog's audit inspection regime, will examine the
effectiveness of audit firms' governance and culture.
(Reporting by Kirstin Ridley; Editing by Susan Fenton)