Common findings from the 2025 audit monitoring visits

Monitoring audit compliance remains central to our role as a regulator. In 2025, our audit monitoring visits identified a high standard of audit work across many firms, alongside modest improvement in outcomes and file quality. However, we continue to see recurring compliance issues. In this article, we summarise the main findings from our 2025 reviews.

The monitoring team has published the common findings from our 2025 audit monitoring visits. The report highlights trends in audit quality, compliance with auditing standards, and identifies common areas for improvement.

A brief overview of the report is set out below. All firms should read the full report, which gives further detail and includes examples of ‘what good looks like’ and case studies of good practice to give some helpful tips for compiling high-quality files.

The Audit Monitoring team carried out 18 visits in 2025, slightly less than in 2024. However, the team reviewed more audit files.

Outcomes improved slightly. More firms achieved positive outcomes, and fewer firms presented the poorest outcomes.

Generally, firms on a shortened cycle (due to poorer quality in the last visit) showed lower levels of audit quality than those on a statutory cycle.

Audit file quality was slightly better than in recent years. 62% of files were graded ‘good’ or only requiring ‘limited improvement’ – the highest levels of compliance since 2021.

The most common International Standards on Auditing (ISA) breaches remained unchanged. These related to audit documentation, risk assessment, fraud considerations, evidence, sampling and going concern.

Common breaches of audit regulations were also fairly consistent with 2024. Issues often arose in statutory requirements, acceptance and reappointment, compliance with ISQM1, and audit compliance reviews. There was also a concerning increase in firms presenting eligibility issues.

Visit outcomes

There was a general improvement in outcomes, with more firms presenting positive outcomes, and fewer firms presenting the poorest outcomes.

The orange and red visits in the chart below are those with significant audit quality concerns, including ethical and/or integrity issues, or eligibility breaches. These cases are the most likely to lead to regulatory action being taken.

_{*Data on the split between ‘no significant issues’ and ‘less significant issues’ before 2020 is not available}

Firms visited under the statutory cycle continued to present better quality outcomes. These visits are limited to firms that have previously demonstrated strong audit quality and a clear commitment to compliance. The Monitoring team's ongoing risk assessment hasn’t identified any heightened areas of concern.

In contrast, firms on shortened cycle visits, and those required by the Authorisation Committee, presented lower levels of audit quality and regulatory compliance. This suggests the previous quality or compliance issues are not being fully resolved.

Audit file quality

File quality improved compared with recent years. In 2025, 62% of files were good or only required limited improvement, which reflects the best levels of compliance since 2021.

2025 also saw the lowest level of files requiring 'significant improvement' in the last five years.

The visits completed covered around a fifth of ICAS audit-registered firms, which is fairly consistent with previous years. The total number of audit firms has continued to fall in recent years, reflecting a wider trend across all Recognised Supervisory Bodies.

Recent file quality trends suggest that firms with more Responsible Individuals (RIs) specialising in audit (rather than it being a small element of a broader general practice portfolio), and those benefitting from economies of scale, may be influencing audit quality more than in previous years. This is reflected clearly in the number of ‘good’ files in 2025, as these were all conducted by the largest firms.

However, around three quarters of the files that needed ‘significant improvements’ were also from larger firms. It’s clear from the visit findings that firm size is not a determining factor when it comes to producing compliant files.

Common breaches of the ISAs

Weaknesses in audit documentation continue to be identified on almost all audit files reviewed.

Beyond this, the most common ISA issues in 2025 were the same as in 2024:

Top 5 – most common ISA breaches identified on 2025 monitoring visits

Common breaches of the Audit Regulations

Any monitoring visit that identifies a breach of an ISA, will also reflect a breach of Audit Regulation 3.10 “A Registered Auditor must comply with the auditing standards and the quality management standards”.

Other than that, the most common breaches of the Audit Regulations remained fairly consistent. One new entry appeared in the top five most common findings, in a particularly concerning area:

Top 5 – most common Audit Regulation breaches identified on monitoring visits

Final thoughts

There’s no getting away from the fact that much of the findings in this report are similar to previous years. There are some areas of audit work where firms continue to struggle to fully comply with the standards. The full report should help firms identify and address those points.

However, there are positive messages that can be taken from the report too. There has been a clear, incremental improvement in the file grades and visit outcomes this year, and this shouldn’t be forgotten.

The vast majority of firms we visited demonstrated a clear commitment to compliance and to improving audit quality. It’s encouraging to see continual evidence that audit firms are trying to do the right thing, often under difficult circumstances.

ICAS reviewers always try to make monitoring visits proportionate and practical, supporting firms to deliver compliant, high-quality audit work.

At the same time, the emerging findings from the recent FRC small and medium-sized enterprises (SMEs) market study identified a perceived lack of scalability and proportionality in auditing standards. Many smaller audit firms believe regulators expect them to do more work for SME audits than is necessary. Firms can be assured that ICAS will continue to work closely with the FRC, and you, to make sure that good practice can be shared and expectations of, and on, all parties involved in audit are realistic.