Transparency Reports

This information informs you of the result of our most recent evaluation of the SoQM, which was completed in December 2025. Our 2026 annual Transparency Report provides details on how our SoQM operates and contains further details about our annual evaluation. 

Under paragraphs 14(a) and 14(b) of ISQM (UK) 1, the objective of the firm is to design, implement and operate a system of quality management for audits or reviews of financial statements, or other assurance or related services engagements performed by the firm, that provides the firm with reasonable assurance that:

(a) The firm and its personnel fulfil their responsibilities in accordance with professional standards and applicable legal and regulatory requirements, and conduct engagements in accordance with such standards and requirements; and

(b) Engagement reports issued by the firm or engagement partners are appropriate in the circumstances.

In conducting the evaluation, we used a range of information sources to identify whether there was evidence of deficiencies within our SoQM which include: 

• results of file reviews conducted internally and externally
• findings from root cause analysis performed in the year  
• ethics breaches identified in the year 
• feedback from the FRC and other regulators 
• other monitoring activities 
• matters referred to or identified by internal teams
• specific testing carried out over the SoQM.

All findings identified were assessed to determine whether they represented a deficiency within the SoQM. 

Where a deficiency was identified, we used a framework to determine whether the deficiency was severe as well as whether the deficiency had a pervasive impact within the SoQM. 

We considered the findings and deficiencies both individually and in aggregate and whilst we identified severe deficiencies, we did not identify any pervasive deficiencies.

This is the third evaluation of our SoQM since the introduction of ISQM (UK) 1 and our overall conclusion is consistent with our previous evaluations.

In accordance with paragraph 54(b) of ISQM (UK) 1, we have concluded that, except for matters related to identified deficiencies that have a severe but not pervasive effect on the design, implementation and operation of the system, the SoQM provides the firm with reasonable assurance that the objectives of the SoQM are being achieved. 

The severe deficiencies we identified across five areas are summarised as follows:

• Engagement Quality Review (EQR): The results from our quality reviews indicate that EQR, which is employed on higher-risk audits and those with a higher public interest element, has not been consistently effective as a quality control procedure.  
• Methodology and audit process: There has been inconsistent application of the firm’s methodology in areas where engagement teams are required to exercise professional scepticism, such as the testing of impairment of non-current assets. This also recognises that there have been deficiencies in the direction, supervision and review of members of engagement teams. 
• Resourcing: We identified a deficiency relating to our quality objective to ensure that audit teams are given sufficient time to consistently perform high-quality audits. This was based on internal and external surveys where our audit personnel indicated that they do not believe they always have sufficient time and resources. 
• The firm’s procedures and policies - In one of our locations we identified deficiencies in respect of adherence to the firm’s procedures and policies which, when taken in aggregate, were severe.
• Monitoring and remediation: Elements of the firm’s framework and processes for monitoring, identifying root causes, implementing remedial actions and assessing its effectiveness are not as formalised, developed and embedded as they should be. This is an integral part of the SoQM and requires improvement if the firm is to get reasonable assurance that the SoQM is effective overall.  

We continue to take steps to remediate identified deficiencies. Details of actions taken and our assessment of their effectiveness are provided in the 2026 Transparency Report. Remediating the identified deficiencies remain a key focus of the Audit Executive and the Public Interest Committee.