[UK] BDO criticised by regulator over audit quality
July 15, 2025
The ‘firm must urgently and robustly reassess’ how to improve it audit quality, says UK watchdog
Accountancy firm BDO has been criticised by the UK audit regulator for poor quality work.
Audit watchdog the Financial Reporting Council in its annual audit quality review singled out BDO for continuing to “demonstrate recurring audit quality findings”, and said the “firm must urgently and robustly reassess how to improve its audit quality”.
The FRC is seeking to improve the quality of audits after a series of scandals. These include the failures of outsourcing company Carillion and bakery chain Patisserie Valerie, despite previous clean bills of health from their auditors.
The report said the number of BDO’s audits assessed that required no more than limited improvement had increased to 50% from 38% the prior year, but said this was “significantly short of expectations”.
The FRC said it will “continue to take appropriate regulatory measures” and said “BDO will remain under close supervision”.
Dominic Stammers, head of audit at BDO, said: “Ensuring consistency in the execution of high-quality audits is a strategic priority for me, our audit executive and the wider leadership team.
“We have a clear plan in place to address the FRC’s findings and embed improvements across our audit practice, and I have full confidence in our people’s expertise and commitment to consistently deliver to the highest standards.”
BDO’s new boss Mark Shaw took over in October and appointed a new leadership team.
Deloitte, EY, KPMG and PwC were praised in the report for having “continued to build upon the substantial progress that they have made in audit quality over recent years”.
Forvis Mazars was also cited for an improvement of audit quality. The regulator said that the audits it assessed as requiring no more than limited improvements more than doubled to 90%, amounting to nine out of 10 audits it inspected. This increased from 44% in the prior year.
The report said that it was an “encouraging indication that the actions being taken by the firm are having an impact”.
[Financial News]
