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July 26, 2009

UK exams not challenging enough

The UK Professional Oversight Board (POB) has made some substantive recommendations on how the UK’s professional accounting bodies can strengthen their examinations.

The board’s annual Report to the Secretary of State for Business, Innovation and Skills identified a number of areas it considers are not tested adequately either in terms of theoretical knowledge or the ability to apply knowledge in practice.

The POB said there were areas where examinations were not sufficiently challenging, especially in the final audit examination at some of the bodies.

There was particular concern about some questions on final audit papers being too related to general assurance engagements rather than statutory audit matters.

In one instance, the POB concluded the arrangements for students to follow a suitable course of theoretical instruction were inadequate.

The POB asked some bodies to review their examinations for the recognised professional qualification and put forward proposals to meet the regulator’s concerns.

However, the board concluded that the bodies take their responsibilities extremely seriously and much of the regulatory practice seen was of a high standard.

The report also highlighted some issues arising from audit monitoring.

It found audit work was fundamentally sound but highlighted some cases where there was a lack of practitioners’ evidence of the audit work they had done.

According to the board, staff at all of the bodies confirmed this is a common issue, particularly in smaller firms.

The POB stressed that poor documentation reduces the perceived quality of audit work and may weaken confidence in the firm and the profession.

It called on all the bodies to work together to identify the root cause and other recurring issues and develop appropriate plans to minimise these and raise the quality of audit work.

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