In September 2019, the UK Financial Reporting Council (FRC) published a review that stated that UK Transparency Reporting by accountancy firms performing audits is currently ineffective. The Report also stated that there was a lack of awareness amongst investors and Audit Committee Chairs that the reports even exist . The report stated that while mandatory Transparency Reports broadly contain the required information, for those aware of the reports, there is a view they are too long and overly positive to be useful.
Other findings of the review include:
• 84% of Audit Committee Chairs were not aware of Transparency Reports
• 15% of reports were not found on firms’ websites
• five of the 33 firms reviewed did not prepare a report at all.
The FRC is calling on firms to reduce the length of their Transparency Reports and explain within them the challenges they are facing in seeking to deliver consistently high-quality audits, along with their assessment of how successful they are being at meeting those challenges. The Report can be downloaded click here