The Institute of Chartered Accountants in England and Wales (ICAEW) has released its 2024 audit monitoring report, revealing that 67% of audited files were rated as either good or generally acceptable.

This marks a slight decline from the 71% recorded in 2023, although the report notes that the average audit quality is likely to be higher due to the targeted selection of complex or challenging audits.

The proportion of audits requiring significant improvements remained stable at 10%, the report said.

The ICAEW’s quality assurance team conducted visits to 401 firms, reviewing 790 audits selected for their complexity.

The report highlights that direct year-on-year comparisons of audit quality are not possible, as different firms—excluding the Big Four—are reviewed on longer cycles.

Among the Big Four, 90% of audits were rated good or generally acceptable, with only one audit identified as needing significant improvement.

The report clarified that audits requiring significant improvement do not necessarily indicate an incorrect audit opinion.

Nick Reynolds, ICAEW Professional Standards Head of Audit, said: “Though we can’t compare results year-on-year, the majority of audits we reviewed continued to remain good or generally acceptable.”

Reynolds further explained the challenges faced by some firms, particularly in attracting and retaining skilled audit staff, which affects audit quality. Larger firms tend to have better recruitment outcomes and, consequently, stronger audit quality results.

“We’ll continue to support our firms to help them build and maintain high standards,” he added, mentioning the release of a new training film titled “Crossing the Line.”

To provide further insights, the ICAEW will be hosting a series of free webinars to discuss the findings from the monitoring visits in greater detail.

The ICAEW, which registers approximately 2,000 firms for audit work, is the UK’s largest recognised supervisory body for monitoring non-Public Interest Entity (PIE) audit quality.