Internal Audit & Controls

The Financial Reporting Council (FRC) is taking steps to reinforce auditor reporting standards concerning the detection and disclosure of material misstatements resulting from non-compliance with laws and regulations. The initiative aims to clarify when auditors should report such breaches and other significant matters to relevant regulatory bodies, thereby enhancing the audit's utility and informativeness.

The National Highway Traffic Safety Administration (NHTSA) announced on Tuesday that Tesla will be recalling almost 55,000 vehicles over concerns about a warning light for braking fluid levels.

The clock is ticking for companies wanting to go public, as a potential government shutdown would result in a depleted SEC staff, bringing a halt to IPOs.

A recently released staff report from the Public Company Accounting Oversight Board (PCAOB) has brought to light a concerning trend in audit deficiencies related to engagement quality reviews (EQRs). According to the report, in 2022, 42% of the firms inspected by the PCAOB received quality control criticisms linked to EQRs, marking a notable increase from 37% in 2020. The report, titled "Inspection Observations Related to Engagement Quality Reviews," emphasizes the importance of the EQR process, where an independent reviewer assesses significant judgments made by the audit engagement team.

The Financial Reporting Council (FRC) in the United Kingdom has announced a £21 million ($26 million) fine against KPMG, one of the Big Four accounting firms, in connection with multiple shortcomings in its audit of the now-defunct construction giant Carillion. The company's collapse in 2018 had profound implications for the British economy, leading to a financial crisis.

A comprehensive survey conducted by the Internal Audit Foundation, part of The Institute of Internal Auditors (IIA), has shed light on the prevailing concerns of internal audit leaders across the world. The report, titled "Global Risk in Focus," gathered insights from internal audit leaders spanning Africa, Asia Pacific, Europe, Latin America, the Middle East, and North America to identify and analyze the most prominent risks affecting their respective regions.

The Financial Conduct Authority (FCA) has taken decisive action against London Court Ltd, imposing stringent restrictions on the firm's ability to conduct regulated activities for new clients and new investments. The restrictions follow concerns raised by the FCA regarding inadequate systems and controls within the company, particularly concerning its My Investment Hub platform.