Bloomberg Law
May 25, 2023, 4:31 PM

UK Watchdog Looks to Improve Small Firms’ ‘Unacceptable’ Audits

Michael Kapoor
Michael Kapoor
Freelance Correspondent

The UK’s accounting watchdog announced a program Thursday to improve standards at smaller auditing firms, after calling the quality of their work “unacceptable” in a December report.

Under the “Scalebox initiative” the Financial Reporting Council will sample parts of the smaller firms’ audits for checks of quality control systems and corporate governance. The plan is aimed at the auditors of Public Interest Entities, which largely consist of FTSE-350 companies.

Membership in the new initiative is voluntary for smaller firms, but FRC in December introduced mandatory registration for PIE auditors, allowing it to ban firms from the market.

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