Monthly audit and accountancy round-up: focus on audit quality and new guidance issued
This month's updates focus on two clear themes: lessons from regulatory reviews and practical guidance to help firms navigate an increasingly complex environment.
Whether reflecting on audit quality findings, strengthening anti-money laundering procedures or considering the ethical implications of new technologies, the common thread is the continued importance of professional judgement and maintaining high standards in a changing landscape.
Recent findings and lessons for firms
The FRC has recently published both its Annual Review of Audit Quality and its Annual Enforcement Review, providing a comprehensive overview of audit quality across the profession and highlighting areas where weaknesses continue to emerge.
For firms, the findings reinforce a number of familiar themes. Professional scepticism, robust challenge of management assumptions and the quality of audit documentation remain firmly in regulators' sights. The reports also demonstrate the importance of ensuring that quality management systems are not viewed merely as compliance requirements but as effective tools for supporting consistent high-quality engagement performance.
While many firms will recognise these themes from previous reviews, the value of these reports lies in their ability to provide real-world examples of where shortcomings have been identified and the consequences that can follow. They offer useful insight into the issues attracting regulatory attention and can inform firms' own monitoring and improvement activities.
Complementing the FRC's publications, ACCA's latest report on root causes identified through quality monitoring reviews explores the underlying factors contributing to recurring deficiencies. Rather than focusing solely on technical findings, the report examines the organisational and behavioural causes that sit behind them.
This perspective is particularly valuable because it moves the conversation beyond identifying errors and towards understanding why they occur. Resourcing pressures, ineffective supervision, insufficient review processes and weaknesses in training all feature as contributing factors. For firms seeking to improve quality outcomes, addressing these root causes is often more effective than focusing solely on individual findings.
The FRC and ACCA publications serve as a timely reminder that quality continues to be defined not only by technical competence but also by culture, leadership and effective oversight. They are well worth reviewing for anyone involved in audit quality, monitoring or firm management.
Guidance for emerging risks and opportunities
Alongside the focus on quality, two significant pieces of guidance have been released that address challenges many firms are currently grappling with.
The first is the updated CCAB Anti-Money Laundering and Counter-Terrorist Financing Guidance for the Accountancy Sector. As regulatory expectations continue to evolve and criminal methodologies become increasingly sophisticated, maintaining effective AML procedures remains a key responsibility for accountancy firms.
The updated guidance provides an important reference point for firms when considering risk assessments, client due diligence and ongoing monitoring and reporting obligations. While AML frameworks are well established across the profession, changes in business models, technology and client risk profiles mean that policies and procedures should never be viewed as static documents.
The guidance also highlights the importance of maintaining a proportionate, risk-based approach. Firms must balance compliance requirements with practical implementation, ensuring that controls remain effective while supporting efficient client service. As regulatory scrutiny in this area continues, many firms may find this an appropriate time to revisit their existing procedures and training arrangements.
The second publication comes from IESBA, which has released guidance on ethical considerations relating to emerging technologies.
As firms increasingly explore the use of AI, automation and advanced data analytics, questions around ethics are becoming more prominent. The guidance encourages accountants to consider not just what technology can do, but how it should be used in a manner consistent with professional values and responsibilities.
Importantly, the publication does not present technology as a replacement for professional judgement. Instead, it emphasises the continuing responsibility of professionals to understand the outputs generated by technology, assess associated risks and remain accountable for decisions made. Areas such as competence, confidentiality, transparency and professional behaviour remain just as relevant in a technology-enabled environment as they have always been.
For organisations actively exploring AI and related technologies, the guidance provides a useful framework for balancing innovation with professional responsibilities.
On the horizon
Alongside these more substantive developments there are several other publications and consultations worth noting.
The Department for Education has released the latest Academy Trust Handbook 2026, setting out the framework that academy trusts will be expected to follow from October.
Meanwhile, two consultations may be of interest to those involved in financial reporting and assurance. The UK Endorsement Board is seeking views on improvements to statement of cash flows reporting, while the IAASB has launched a consultation on proposed revisions to its standard for audits of less complex entities. Both consultations have the potential to influence future reporting and audit requirements, making them worth monitoring over the coming months.
As always, keeping pace with regulatory, ethical and technical developments can be challenging. However, the publications released this month provide useful opportunities to reflect on current practices, identify areas for improvement and prepare for future change. If any of these topics are particularly relevant to your organisation, now may be a good time to review the underlying guidance and consider whether any actions should be added to your team's agenda for the months ahead.