UK: audit quality - the Audit Inspection Unit's report on firms auditing ten or fewer entities

The Professional Oversight Board - part of the Financial Reporting Council - has published the Audit Inspection Unit's report on its inspections for 2010/11 at firms auditing ten or fewer entities: see here (pdf). The AIU reviewed selected aspects of nine audits and found that they all required improvement. In respect of four of these audits, the AIU found that significant improvement was required. The AIU identified the quality of audits in respect of multi-national groups as a major concern. Indeed, possible disciplinary action may follow as a result of the AIU's investigations in respect of two of the audits requiring significant improvement. Other areas for improvement identified by the AIU included the going concern assessment and the standard of reporting to audit committees.