{"id":16117,"date":"2021-08-09T12:03:29","date_gmt":"2021-08-09T12:03:29","guid":{"rendered":"https:\/\/www.openbusinesscouncil.org\/?p=16117"},"modified":"2022-05-04T21:37:23","modified_gmt":"2022-05-04T21:37:23","slug":"1-in-3-big-business-audits-fail-to-meet-uk-standards-frc-reveals-as-kpmg-is-fined-13-million","status":"publish","type":"post","link":"https:\/\/www.footballthink.com\/1-in-3-big-business-audits-fail-to-meet-uk-standards-frc-reveals-as-kpmg-is-fined-13-million\/","title":{"rendered":"1 in 3 Big Business Audits Fail to Meet UK Standards – FRC Reveals as KPMG is Fined \u00a313 Million"},"content":{"rendered":"
Chris Biggs, Partner at Theta Global Advisors, discusses the newly integral role of mid-sized professional service firms in improving UK professional service standards.<\/strong><\/p>\n <\/p>\n The Financial Reporting Council (FRC) have reported that around a third (29%) of audits performed by large professional service firms of major companies fail to meet UK standards and 33% in need of improvement. With less than 60% of KPMG’s audits meeting the standards required to be considered top quality audits, the Big Four are again coming under fire – a \u00a313 million fine imposed on the firm falls just short of the record \u00a315 million fine Deloitte received last year. In contrast, research from accounting and consultancy disruptors, Theta Global Advisors has seen 19% of smaller, mid-sized professional service firms taking on previously inaccessible major corporations as clients and new business, fostering innovation in the sector and improving standards.<\/p>\n Despite criticisms of Kwasi Kwarteng’s\u00a0recent reform proposals for the UK professional services sector, a shake-up is long overdue with the FRC transitioning into the Audit, Reporting and Governance Authority (ARGA) with broader powers to reflect this. For too long, governing bodies have monitored compliance and failed to foster innovation. However, Covid-19 has triggered the success of smaller, mid-sized professional service firms which offer more tailored, flexible approaches, and are integral in Kwarteng’s plans to increase competition in the sector in order to drive the disruption of the Big Four to avoid further scandals as seen with Thomas Cook, P\u00e1tisserie Valerie, Carillion, and more.<\/p>\n Supportive structures for smaller and mid-size firms can allow for the continued, seamless disruption of the sector, removing the problematic conflicts of interest that have triggered concerns for the services offered by the big firms in the UK. While a lack of auditor-independent advisors now may leave far too few options as businesses begin to see the need for new professional service firms, grassroots firms are filling the boots of big firms in a truly unprecedented manner.<\/p>\n1\/3 Audits in UK Below National Standards<\/h2>\n
Auditor-Independent Advisors in UK<\/h2>\n