BDO and Mazars have been called out for the ‘unacceptable’ quality of their work by Britain’s accounting watchdog.
It follows Financial Reporting Council spot checks on audits from EY, PwC, Deloitte, KPMG – known as the Big Four – and BDO, Mazars and Grant Thornton.
The FRC found the results of the inspections of BDO and Mazars audits ‘remain concerning’.
Called out: Auditors BDO, pictured, and Mazars have been called out for the ‘unacceptable’ quality of their work by Britain’s accounting watchdog
Only half of Mazars’ eight audits were deemed of an acceptable quality.
The report also said that just seven of the 12 BDO audits inspected by officials were deemed good enough.
BDO said it had made significant investments in resources in its audit practice over the last year, including the addition of 350 staff.
It added that these steps took time to embed.
Mazars said it was very disappointed with the findings and it was committed to addressing the issues identified, and would continue to invest in and focus on applying the highest quality standards.
The FRC said in its report today: ‘The FRC highlighted concerns at both of these firms in the 2021 reports and these firms must therefore take further actions to improve audit quality as a matter of urgency.’
The FRC said there had been ‘some improvement’ across the auditing sector following heavy scrutiny of failings linked to the major collapses of firms like Carillion.
Sir John Thompson, the FRC’s boss, said its latest report highlighted that ‘consistent, long-term improvement’ was still needed across the industry.
Shifts: The FRC’s assessment of accounting firms over a number of years
All five audits by mid-tier Grant Thornton were deemed acceptable, but the firm was fined £1.3million by the FRC earlier this week over failings in audits for Sports Direct.
KPMG, which was singled out as a particularly poor performer in last year’s report, ‘significantly improved’ although the regulator said it will still closely monitor the firm’s progress.
Overall, 75 per cent of audits for all firms inspected by the watchdog were good or required limited improvement, rising from 71 per cent a year ago.
Sir Jon Thompson said: ‘We will monitor closely the potentially negative impact on the public interest that the de-risking by firms of challenging audits may have on audit quality.
‘The FRC will continue to build on our assertive supervisory approach to ensure firms are consistently delivering high quality audit which will drive increased choice and resilience in the market over time.’
#fiveDealsWidget .dealItemTitle#mobile {display:none} #fiveDealsWidget {display:block; float:left; clear:both; max-width:636px; margin:0; padding:0; line-height:120%; font-size:12px} #fiveDealsWidget div, #fiveDealsWidget a {margin:0; padding:0; line-height:120%; text-decoration: none; font-family:Arial, Helvetica ,sans-serif} #fiveDealsWidget .widgetTitleBox {display:block; float:left; width:100%; background-color:#af1e1e; } #fiveDealsWidget .widgetTitle {color:#fff; text-transform: uppercase; font-size:18px; font-weight:bold; margin:6px 10px 4px 10px; } #fiveDealsWidget a.dealItem {float:left; display:block; width:124px; margin-right:4px; margin-top:5px; background-color: #e3e3e3; min-height:200px;} #fiveDealsWidget a.dealItem#last {margin-right:0} #fiveDealsWidget .dealItemTitle {display:block; margin:10px 5px; color:#000; font-weight:bold} #fiveDealsWidget .dealItemImage, #fiveDealsWidget .dealItemImage img {float:left; display:block; margin:0; padding:0} #fiveDealsWidget .dealItemImage {border:1px solid #ccc} #fiveDealsWidget .dealItemImage img {width:100%; height:auto} #fiveDealsWidget .dealItemdesc {float:left; display:block; color:#004db3; font-weight:bold; margin:5px;} #fiveDealsWidget .dealItemRate {float:left; display:block; color:#000; margin:5px} #fiveDealsWidget .dealFooter {display:block; float:left; width:100%; margin-top:5px; background-color:#e3e3e3 } #fiveDealsWidget .footerText {font-size:10px; margin:10px 10px 10px 10px;} @media (max-width: 635px) { #fiveDealsWidget a.dealItem {width:19%; margin-right:1%} #fiveDealsWidget a.dealItem#last {width:20%} } @media (max-width: 560px) { #fiveDealsWidget #desktop {display:none;} #fiveDealsWidget #mobile {display:block!important} #fiveDealsWidget a.dealItem {background-color: #fff; height:auto; min-height:auto} #fiveDealsWidget a.dealItem {border-bottom:1px solid #ececec; margin-bottom:5px; padding-bottom:10px} #fiveDealsWidget a.dealItem#last {border-bottom:0px solid #ececec; margin-bottom:5px; padding-bottom:0px} #fiveDealsWidget a.dealItem, #fiveDealsWidget a.dealItem#last {width:100%} #fiveDealsWidget .dealItemContent, #fiveDealsWidget .dealItemImage {float:left; display:inline-block} #fiveDealsWidget .dealItemImage {width:35%; margin-right:1%} #fiveDealsWidget .dealItemContent {width:63%} #fiveDealsWidget .dealItemTitle {margin: 0px 5px 5px; font-size:16px} #fiveDealsWidget .dealItemContent .dealItemdesc, #fiveDealsWidget .dealItemContent .dealItemRate {clear:both} }
