The Financial Reporting Council (FRC) revealed the performance of 20 major local audits undertaken by six of the largest audit firms has improved YOY with those requiring improvement down from 60% to 30%, according to its latest report ending 31 March 2020.
It revealed the percentage is an improvement on the prior year, with inspection results showing 60% of audits inspected required either improvements or significant improvements.
Key areas still requiring action include, strengthening the audit testing, improving the evaluation of assumptions used in investment and improving the evaluation of assumptions used in property, plant and equipment valuations.
According to the FRC It is “encouraging” that the firms have taken action in response to previous findings, however, the timeliness of auditor reporting is “disappointing”.
The FRC said it had to replace half of the local government audits initially selected for inspection because the audits had not been finalised and signed.
Sarah Rapson, executive director of supervision at FRC, said: “High quality audit of local government and other public bodies is an important public interest function, providing an independent view of local body financial statements and the arrangements in place to secure value for money.
“While it is encouraging to note the firms’ response to previous year’s findings, it is clear significant progress is still required to ensure high quality audits are being delivered on a consistent basis.”