The FRC has published new firm-level audit quality indicators (AQIs) following clear support from users of audit services for greater insight into many of the indicators that drive audit quality.
Users of audit services will have additional sources of information which will enable detailed and robust conversations about audit quality with firms.
The AQIs will provide users of audit services provided by the largest UK audit firms with more information about factors that drive audit quality and help them make an informed choice when selecting an auditor.
Audit committees and others will also be able to assess firms on a consistent basis, with the knowledge that AQIs across the firms will be calculated in the same way.
The 11 AQIs include a range of comparable indicators on perceived culture within an audit firm, audit quality inspection results, staff workloads, and the level of partners’ involvement in audits.
The FRC’s Executive Director of Supervision Sarah Rapson said:
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FRC executive director of supervision, Sarah Rapson, said: “Both audit firms and audit committees of PIEs must continue to focus on audit quality. With more comparable information, users (including committees) will have better insight into how audit firms are prioritising audit quality. This will facilitate better conversations regarding the different factors that drive audit quality.”
For more on the FRC