FRC publishes annual audit firm inspection results
News types: Inspection, Company Specific
Published: 15 July 2025
The Financial Reporting Council (FRC) has today published its Annual Review of Audit Quality, which calls for all stakeholders of the UK audit landscape to work together to deliver a thriving market and profession working in the public interest.
The report covers the inspection and supervision results of audit firms across the UK Public Interest Entity (PIE) market. These results are based on a risk-based sample of the audits undertaken and are published alongside individual reports for Tier 1 audit firms (BDO, Deloitte, EY, Forvis Mazars, KPMG, and PwC).
The latest inspection results indicate continued improvement in audit quality, especially among Tier 1 firms. Five out of six achieved positive audit quality outcomes on 90% or more of their audits. While Forvis Mazars has shown significant gains in audit quality, continued effort is needed by the firm to ensure lasting improvement. BDO continues to demonstrate recurring audit quality findings and the firm must urgently and robustly reassess how to improve its audit quality in these areas.
Despite significant investments by the largest firms to enhance audit quality, there is a risk that the gap between audit quality delivered by Tier 1 firms and other firms in PIE market increases. Although some non-Tier 1 firms demonstrate the ability to deliver high-quality audits, many still struggle to consistently meet adequate standards and maintain robust quality management systems.
While the responsibility for a resilient audit profession and market is not the FRC’s alone, it is vital the supervisory approach of the FRC continues to underpin the importance of audit quality without creating disproportionate barriers. Developments in technology, ownership structures, and the business environment also present challenges and opportunities for the future of the UK audit landscape. The FRC’s Future of Audit Supervision Strategy project is well underway and will review and build on our supervisory approach over the next year. The FRC will continue to work with the whole of the UK audit ecosystem to ensure its supervisory approach supports a thriving market and profession working in the public interest.
The FRC’s Executive Director of Supervision, Sarah Rapson, said:
“Audits are an important part of the UK economic and business ecosystem. They support well-run companies to attract the capital that is essential to fund innovation and scale businesses to thrive to the benefit the UK economy.
While audit quality in the UK has improved significantly since 2018, and compares favourably internationally, the market should not be complacent. Continued progress, particularly in the Public Interest Entity market, requires sustained investment and cultural change, underpinned by robust systems of quality management.
The audit market is evolving rapidly, shaped by technology, new business models, and shifting expectations. Our supervisory approach must evolve with it. But the responsibility for securing the future of the UK audit market is not ours alone. We call on audit firms, company directors, investors, professional bodies, and educators to continue to work with us to build a thriving, high-quality audit profession that meets the needs of UK businesses and reinforces public confidence in our markets.”
Read the Overview report and the firm specific Tier 1 audit firm inspection results.
Listen to the latest FRC In Conversation podcast episode with Kate O'Neill, Director of Stakeholder Engagement and Corporate Affairs, and Sarah Rapson, Executive Director of Supervision, in which they discuss the 2025 Annual Review of Audit Quality.