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1 Dec 08

The Professional Oversight Board’s review of audit training has raised fears that small firms cannot always offer trainees and staff sufficient experience

The Professional Oversight Board (POB) has published its review of practical training for auditors. The review considered the effectiveness of the arrangements for the practical training of auditors in the UK in light of increases in audit exemption thresholds and resulting changes in the market structure for audit in the UK.

The review included all aspects of practical training including the approval and monitoring of training firms, student training records requirements, their completion and monitoring.

A team from the University of Glamorgan, led by Professor Neil Marriot, was jointly appointed by the professional bodies and the POB to gather the views of students and mentors.

The POB’s review drew seven conclusions which may be divided into profession-wide and operational issues. The most significant profession-wide issue, following increases in audit exemption thresholds, is the lack of availability of audit work in small audit firms to ensure trainees and staff have sufficient experience to achieve the audit qualification or to maintain competence at a reasonable cost once qualified.

The review found that the bodies had effective operational procedures governing the arrangements for the practical training of auditors though application of the procedures could be improved in certain areas. The POB plans to monitor progress by the bodies on operational procedures during routine compliance monitoring visits.

For some students, specially in smaller practices, gaining and maintaining competence in audit is a complex cross-profession issue recognised by the bodies.

The next stage of review will be the establishment of a working group of representatives from the bodies and the POB to begin identifying, assessing and prioritising possible actions. The outcome of these discussions will be shared with firms.

Paul George, director of auditing, said: “Continuing confidence in the profession relies on maintaining the highest standards in the training of auditors. We welcome the support of the bodies during this review and are heartened to see that they recognise the profession-wide concerns we have highlighted. We look forward to continuing to work with them to find ways to address the issues highlighted in this report.” n

Review of Practical Training for Auditors is available on the FRC website

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