There are no direct repercussions for the audited body, but we recognise the problems that delayed audits cause. The Accounts and Audit Regulations 2015 set out the requirements for publishing accounts. There is a statutory deadline for the publication of audited financial statements, but this is only applicable when the body has audited accounts to publish. As a result, Reg 10(2) provides that where an audit of accounts has not been concluded by the specified publishing date then an authority must publish a notice stating that it has not been possible to publish the statement of accounts and its reasons for this. The wording of the notice is at the discretion of the authority.
We work with firms to improve matters where service has fallen short, but our contractual options are limited. Our aim is to get to a position where ultimately we are able to replace auditors who do not meet the quality measures within our contracts and are not able to resolve the issues. However, this would require a more buoyant market of local audit suppliers than is the case in 2021.
The FRC’s Ethical Standard precludes contracts that contain fees that vary according to a pre-determined measure (for example specifying a date by which an audit opinion must be given).