Common findings from the 2024 audit monitoring visits

Monitoring audit compliance remains central to our role as a regulator. In 2024, our audit monitoring visits revealed a significant amount of good audit work. However, we also noted a slight uptick in compliance issues compared to the previous year. In this article, we outline the key findings from our 2024 reviews.

In 2024, the Audit Monitoring Team conducted 25 visits, maintaining the same number as in 2023. The outcomes showed a slight increase in visits with no more than less significant findings, rising from 18% to 24%, but also a notable rise in visits with the most serious issues, increasing from 8% to 16%. It was interesting to note that firms on a 6-year cycle demonstrated better outcomes, than those on a shortened cycle, indicating firms with poorer outcomes in the last visit had not sufficiently improved

Audit file quality

The overall quality of audit files declined, with only 52% of files being considered compliant, down from 60% in 2023. Non-compliant files rose to 48%. Common breaches of International Standards on Auditing (ISA) included:

• ISA 230 (Documentation): 92% of visits
• ISA 315 (Risk assessment): 92% of visits
• ISA 240 (Fraud considerations): 84% of visits
• ISA 500 (Evidence): 80% of visits
• ISA 530 (Sampling): 64% of visits
• ISA 570 (Going concern): 64% of visits

Regulatory compliance

Any monitoring visit that identifies a breach of an ISA, will also reflect a breach of Audit Regulation 3.10. As a result, a breach of this regulation was identified in every monitoring visit undertaken in 2024. Following that the most common
breaches of the Audit Regulations related to:

•    Audit Regulation 3.03 (Acceptance and reappointment): 72% of visits.
•    Audit Regulation 3.08 (Statutory requirements): 56% of visits.
•    Audit Regulation 3.10 (ISQM1 compliance): 52% of visits.
•    Audit Regulation 3.02 (Ethical compliance): 40% of visits.
•    Audit Regulation3.20 (Audit compliance review): 40% of visits.

Recommendations

It’s important to recognise and highlight the significant amount of good audit work that we have reviewed over the past year. In the vast majority of cases, firms have presented a clear commitment to compliance and a positive approach to the visit process. 

However, to improve audit quality and regulatory compliance, we would advise firms to address common weaknesses, enhance documentation practices and ensure compliance with required standards

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