Firm Metrics
2 minute read
Overview
Individual audit and SoQM inspection findings are not the only metrics to assess audit quality. The FRC considers other data points, including: the firms’ own systems of internal monitoring and their own metrics, as well as monitoring by the ICAEW. For the first time, we have published data on Audit Firm Metrics (formerly Audit Quality Indicators), an initiative voluntarily engaged with by the firms. This data is intended to inform and stimulate meaningful conversations between the firms and audit committees about how quality is defined and managed by a firm.
Firm metrics should enhance transparency about, and provide deeper insight into, some factors related to performance of audit firms. These metrics provide easy to use, consistent, and comparable information about various aspects of audit firm performance.
In addition to Audit Quality Review (AQR) and Recognised Supervisory Body (RSB) inspection results, these metrics provide information on further aspects of the firms’ performance including audit firm culture, internal inspection results, staff workload, and partner involvement. This provides a holistic view across the firms, and offering users of audit services, including audit committees and investors, a more comprehensive understanding of larger audit firms’ performance.
We recognise that these metrics are not formulaically or mechanistically linked to audit quality. However, when used effectively, they can prompt valuable discussions between Audit Committee Chairs (ACCs) and firms about factors affecting audit quality, broadening ACCs’ perspectives when recommending external auditors to boards or assessing the performance of their existing auditor. This supports the functioning of the audit market as well as the FRC’s objective of a more resilient audit market that provides greater choice.
Firm Metrics offer context‐specific insights. The significance of particular values for any given metric can vary and should be considered alongside other pieces of information, including their prior‐year values. This quantitative data should also be considered in the context of the qualitative aspects of auditing, as outlined in FRC publications such as the Audit Committees Minimum Standard, and What Makes a Good Audit.
All content provided in the report was provided directly by the firms and is unchanged by the FRC. Firms have provided supporting narrative where they wished to add technical context to specific metrics.
Further details can be found in this Definitions Note.
| Name | Firm Metrics July 2025 |
|---|---|
| Publication date | 15 July 2025 |
| Type | Report |
| Format | PDF, 346.5 KB |
FRC Firm-level Audit Quality Indicators Definitions Note (revised 21 February 2025)
The Definitions Note defines the measurement and calculation of each of the firm-level AQIs in order to ensure audit firms in scope of reporting measure their AQIs in a consistent way. An appendix included also lists out the amendments made to the list of AQIs since the publication of the Feedback Statement in December 2022, after further discussions with the firms likely to be in scope on the practicality of producing the metrics. Firms in scope participated in the pilot year to collect the AQI data for private reporting to the FRC in June 2024, with public reporting from Summer 2025.
| Name | Firm-level AQIs Definitions Note (February 2025) |
|---|---|
| Publication date | 21 February 2025 |
| Format | PDF, 288.7 KB |