The Institute of Chartered Accountants in England and Wales (ICAEW) has published its audit monitoring report for 2025, which indicates an improvement in the quality of audits reviewed over the year.
According to the report, 73% of audits inspected in 2025 were assessed as good or generally acceptable, with no need for follow-up action. In 2024, that figure was 67%.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The proportion of audits classified as requiring “significant improvement” fell to 6% in 2025, from 10% in 2024.
Over the course of the year, the ICAEW’s quality assurance team visited 375 companies and reviewed 667 audit files.
The files selected were typically among the most complex or demanding audits carried out by those companies.
The ICAEW said that, as a result of this targeted selection, the average standard of audit work across all engagements is likely to be higher than the sample might suggest.
The institute cautioned that year-on-year comparisons have limits.
Except for the ‘Big Four’, it reviews different companies each year as most are assessed on longer monitoring cycles.
It added that audit quality tended to decline when companies expanded and took on more complex audits, experienced difficulties transitioning from paper-based systems to audit software, or faced staffing challenges.
ICAEW Professional Standards audit head Nick Reynolds said: “We were pleased to see a decrease in the number of audits requiring significant improvements and the increase in the proportion of audits being rated good or generally acceptable is the brightest picture since 2021.
“While we see a high standard of audit work across our registered firms, the underlying reasons for firms encountering difficulties typically fall into three main categories.
“These include the challenges of maintaining audit quality while pursuing a growth agenda; the adoption, implementation or integration of new technology; and attracting and retaining good audit staff.
“As an improvement regulator, we will continue to support our firms with comprehensive resources and guidance to help them build and maintain high standards.”
Alongside the monitoring findings, the ICAEW has strengthened its approach to proactive supervision through changes to its Audit Regulations.
Companies must now notify the institute within 21 days of the movement of certain audits after they have been accepted.
The ICAEW said these notifications will provide more timely information, enabling earlier engagement with companies to support audit quality and help reinforce public trust in the work of registered practices. The institute registers around 1,800 companies to undertake audit work.
