Requirement of Working with Enhanced Professional Skepticism, for BDO and GT

Saturday, March 30, 2013 Print Email

On the review carried out by FCR’s review team, about some of the Grant Thornton and BDO's listed company audit work, serious matters have been raised. During the review, by FCR’S review team for substantial improvement in quality of audit, of approximately a third of engagements inspection team found that both firms taking flack for a lack of professional skepticism.

Grant Thornton has been cautioned by FCR’s Audit inspection Unit after inspection of ten engagements, despite the five were performed to a good standard, of causing their growth strategy to damage audit quality. "Emphasis is given to the quality of the firm's work as a means of achieving that growth...Nevertheless, there is...a risk that audit quality may be adversely affected," the review team said.

AIU recognized that there was insufficiency of audit evidence related to financial assets and intangibles, the carrying value of fixed assets and the loss of audit work papers. The AIU has also highlighted issues related to the level of professional skepticism applied on five audits. Head of audit at Grant Thornton, Mark Cardiff responding to the results said, “"further refining" its practices to ensure its "reputation for being committed to the highest levels of audit quality remains.”

Four BDO’s audit engagements were also inspected, two of them were up to the mark whilst other two required substantial improvements. On the one follow-up review of preceding inspection of audit by inspection team, disappointment was expressed. They said, “Certain issues "had not been adequately addressed" by the firm.

BDO was also asked to remove any indications that could be interpreted as emphasizing on the cross-selling of non-assurance services to audited entities, by reviewing their audit strategy."The inference that fees should be set lower if significant non-audit fees are likely to be earned is contrary to the Ethical Standards," the AIU said. In response to review, BDO said it acknowledges "considerable progress in implementing actions to address the importance of enhancing certain areas.”

Last year, according to Financial Director's 2013 survey:


Audit fee

Non-audit fee




Grant Thornton



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