Regulatory Compliance and Quality Review Programme 2019

Appendix 7 – Summary of QRP improvement actions Mazars

Key messages from file reviews

File reviews this year have identified recurrence of significant issues, particularly the audit of property valuations and defined benefit pension arrangements.

Firms should:

  • complete Root Cause Analysis as applicable the identified improvement areas;
  • determine the actions required to address the common weaknesses identified; and
  • prioritise actions required to address the significant recurring matters raised including consideration of a formal action plan response and monitoring of its application at a local level.

Firm response
The audit of the valuation of PPE and defined benefit pension liabilities continues to be a focus area for us.  We have put in place a number of measures to improve the quality of our work in these areas over the last 12 months.

These include:

  • Delivering detailed training to local government audit teams which focussed on the audit of PPE valuations and the importance of exercising professional scepticism when challenging the results of valuers’ work; and
  • Issuing detailed guidance to audit teams to support them to improve their work on PPE valuations and the audit of defined benefit pension liabilities, including a suite of mandatory tests to be completed on all files.
  • Undertaking independent hot reviews of audit work on PPE valuations for a selection of major local audits.

Our commitment to improving audit quality, particularly in these key areas, has been underlined through communication to Key Audit Partners and the wider team throughout the 2018/19 audit cycle.

We have also undertaken independent hot reviews of audit work on PPE valuations for a number of major local audits to ensure that the key messages in the guidance and training have been actioned by our teams.  These key messages emphasised the need to appropriately:

  • challenge management’s experts and their key assumptions underpinning valuations; and
  • corroborate and test the completeness and accuracy of data used by the valuer.

We will continue to develop guidance in these areas to ensure that our work is continuously improving.  We intend to update our guidance on auditing PPE valuations in the Autumn of 2019.

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