Top takeaways: FRC Audit Quality Inspection Results 2021/21 - Areas of Judgement

Audit Quality Deep Dive: Areas of Judgement

Areas of judgement, such as estimates and assumptions, are inherently subjective. They are susceptible to management bias and highly sensitive to change. When evaluating management judgements, auditors should apply appropriate challenge, test assumptions and the consider the sensitivity of these assumptions.

The FRC raised multiple areas of judgement as key findings for all seven firms.

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Inflo TL Program_Areas of judgement_Aug 2021_Page_01

Catch up on part 1 – Audit Quality Deep Dive: Revenue Testing

Catch up on part 3 – Audit Quality Deep Dive: Other Findings

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Launched in 2021, Inflo Insight delivers thought leadership articles, research and expert opinions on accounting and audit issues. Our content examines the complexity and challenges audit firms are facing in an evolving business landscape. Our intention is to summarise and simplify key trends and takeaways that saves you time, builds knowledge and capability to adapt.

Inflo was founded by former Big Four auditors with the objective of making more progressive audit technologies and methodologies available to audit firms of all sizes. Our Digital Audit technology and approach improves the quality and relevance of the audit product for over 70% of the UK’s largest, non-Big Four firms. Our goal is to educate and support the profession to embrace and adapt to change and strengthen your advantage.

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To find out more about the 2020/21 FRC audit quality inspections, subscribe to our mailing list. We will take a deep-dive into the common key findings and the actions firms can take to improve audit quality in the most challenging areas of the audit process.  

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