Audit quality endorsed by FTSE 350 firms

Audit quality has improved according to the second year of a survey of the Audit committee (AC) chairs of FTSE 350 firms.

However, the latest study, jointly overseen for the first time by the Financial Reporting Council (FRC), found that the vote of confidence was tempered by concerns about professional scepticism.

Audit quality

The survey asked the AC chairs eight questions on audit quality, with their responses being ranked on a scale of one to seven (one being the lowest and seven highest). Comments could also be added, and the questions were the same as last year so that an accurate comparison could be made.

According to the FRC, there was ‘overwhelmingly positive’ feedback on audit quality, and the majority of respondents gave their auditor a rating of six or seven for almost all of the queries.

Surveys were sent to the AC chairs of all FTSE 350 companies as well as to a selection from listed companies outside of the FTSE 350.

Scores

The lowest overall scores were for those questions that asked about professional scepticism and the auditor’s response to regulatory oversight. This was the same in last year's survey.

All categories actually saw evidence of improvement however, with the highest being independence and objectivity.

The majority of those who took part viewed their experiences with their audit firm as positive. The quality of the audit engagement partner was highlighted as being a vital factor in a quality assessment of the audit, and the importance of independence was also a big issue.