Core Viewpoint - Large audit networks in the UK, including Deloitte, EY, KPMG, and PwC, are advocating for the Financial Reporting Council (FRC) to cease the routine naming of companies under investigation, citing concerns over the impact on business activity and the potential for indirect identification of individual partners [1][5]. Group 1 - The FRC has been urged to stop naming companies under investigation, with major audit firms and mid-tier companies participating in discussions to file complaints regarding the current publication approach [1][2]. - The FRC's investigation announcements typically include details such as the auditor, client, and audit period, which can lead to the identification of engagement partners [3]. - There is a suggestion within the audit profession to limit identification to cases of serious wrongdoing or to name companies only after investigations conclude [3][4]. Group 2 - The industry has proposed that the FRC could omit the names of audited companies to reduce the risk of indirect identification of individual partners [4]. - The FRC has acknowledged the engagement from the industry but has refrained from commenting on the consultation responses until they are submitted [4]. - The Financial Conduct Authority (FCA) previously decided against expanding the practice of naming companies under investigation due to strong opposition from the financial sector, indicating a broader concern about the implications of such practices [4][5].

Core Insights - The audit profession has faced significant scrutiny due to high-profile corporate failures, raising concerns about the reliability of financial reporting in the UK capital markets during a period of geopolitical volatility [2][3][4] - The establishment of the Centre for Public Interest Audit (CPIA) aims to enhance trust in the audit profession and improve audit quality through evidence-based research and stakeholder engagement [5][6][7] Regulatory Changes - Following the collapses of companies like Carillion, an independent review led by Sir John Kingman recommended transitioning from voluntary funding to a statutory levy for the audit regulator, the Financial Reporting Council, to eliminate conflicts of interest [3] - The Competition and Markets Authority pointed out the concentrated nature of the UK audit market, indicating a need for reform [4] Audit Trust Index - The Audit Trust Index (ATI), launched in 2024, serves as an annual survey to track stakeholder perceptions of audit trust, identifying key drivers and obstacles to achieving high-quality audits [8] - The ATI aims to establish a baseline for stakeholder trust and highlight areas for improvement and innovation within the audit profession [8]

Core Insights - UK-based audit firm Menzies has appointed six new partners to enhance its Audit, Assurance, and Deal Advisory teams, expanding its capacity to serve both commercial and not-for-profit sectors [1] Group 1: Audit and Assurance Team - The audit and assurance group has welcomed four new partners focusing on technical audit, real estate, social housing, and not-for-profit sectors [1] - Andrew Collier has been appointed as audit and accounts partner in the London office, while Elizabeth Hatchman is now the audit, risk assurance, and advisory partner for the not-for-profit sector [2] - George Shillam has taken on the role of audit and assurance partner for not-for-profit, housing, and charity sectors in London [2] - Grant Lee is the new audit partner for real estate, private equity portfolio companies, and tech firms at the Heathrow office [3] - Shillam manages not-for-profit clients and social housing portfolios, overseeing external audits and regulatory investigations [6] Group 2: Deal Advisory Team - David Ellis has joined the Leatherhead office as deal advisory partner, previously serving as corporate finance partner at Azets [8] - Ellis has experience advising on acquisitions and sales, including the €17 million sale of Defluo to Kanalservicegruppe [8] - Dean Curtis is the corporate finance and deal advisory partner in the Manchester office, contributing to the expansion of the Deal Advisory team across the South East and North West regions [7]

Core Insights - The adoption of advanced technologies in auditing has progressed from experimentation to a more mature stage, highlighting the increasing importance of auditors' expertise in data interpretation and professional judgment [1] Group 1: Technology Utilization in Auditing - Finance leaders are leveraging AI in various audit activities, with 61% using it for data management, 54% for risk detection and management, 50% for automating data entry, 45% for fraud detection, and 43% for predictive analytics [2] - 63% of finance leaders believe technology enhances audit efficiency and collaboration, marking an increase from the previous year [2] Group 2: Auditor and Client Technology Parity - There is a growing parity in technology capabilities between clients and auditors, with 93% of respondents stating their auditors' technological sophistication matches their own systems, up from 89% last year [3] - 85% of finance leaders feel their auditors' technological abilities meet or exceed expectations, an increase from 77% the previous year [3] Group 3: Trust and Investment in Technology - Trust in audit firms using advanced technologies has increased, with 81% of finance leaders expressing greater confidence, an 18% rise compared to last year [4] - 97% of finance leaders are willing to pay more for technology-driven audit services, and the belief that technology leads to audit cost reductions has grown from 29% to 46% [4] Group 4: Data Governance Concerns - Despite the increased reliance on advanced technologies, concerns about data governance are rising, with only 46% considering their practices "mature," down from 55% last year [5] - Only 43% of finance teams report having a formal governance framework for AI, while high concerns persist regarding cybersecurity risks (82%), data privacy (80%), and potential inaccuracies from AI (71%) [5] Group 5: Regulatory Uncertainty - Regulatory uncertainty is a significant concern, with 74% of finance leaders citing risks associated with unclear guidance on AI use in audits [6] - The managing principal of BDO Digital Transformation and Innovation Assurance noted that audit technology has reached an inflection point, with finance leaders now expecting auditors to utilize advanced technology [6]

Core Insights - Verizon Business has equipped KPMG's new U.S. headquarters with a dedicated network powered by Verizon 5G, enhancing connectivity for clients and employees [1][2] - The Neutral Host Network solution aims to provide high-performance connectivity, facilitating collaboration and decision-making [2][3] - This partnership reflects a commitment to innovation and digital transformation, particularly in enhancing workplace experiences and operational efficiency [3] Company Developments - KPMG's new headquarters at Two Manhattan West is designed to offer a tech-enabled experience, supported by Verizon's advanced network solutions [2] - The collaboration between KPMG and Verizon is an expansion of their long-standing partnership, focusing on delivering reliable connectivity [3] - Verizon's Neutral Host Network will connect devices to the public networks of major U.S. carriers, simplifying in-building coverage [2] Industry Trends - Neutral Host Networks are increasingly adopted by large enterprises to reduce operational complexity and future-proof network investments [2] - The deployment of such networks is indicative of how organizations are rethinking workplace experiences to enhance employee satisfaction and business outcomes [3] - Verizon's focus on 5G and mobile edge compute solutions highlights the ongoing digital transformation in sectors like healthcare and life sciences [3]

Core Insights - The Financial Reporting Council (FRC) has published its 23rd Key Facts and Trends (KFAT) report, analyzing the UK accountancy and audit sector, with contributions from 31 firms auditing Public Interest Entities (PIEs) [1] Membership Trends - The accountancy profession is experiencing growth, with UK and global membership numbers reaching 408,000 and over 623,000 respectively, despite a slight decline in student enrolment [2][3] - Membership growth rates are 0.8% in the UK and 1.1% globally from 2023 to 2024, while student numbers have decreased by 0.3% in the UK and 0.1% globally [3] Audit Market Dynamics - The audit market is consolidating, with a reduction in registered audit firms, yet an increase in FTSE 350 audits conducted by firms outside the Big Four [2] - The number of statutory audit firms has declined by 24.9% over the past five years [4] Student Achievement and Qualifications - Despite a decline in student numbers, there has been a significant 12.3% increase in students achieving membership status worldwide [3] - The number of individuals obtaining the Audit Qualification in 2024 has slightly decreased to 1,800 [3] Revenue Insights - The ACCA reported the highest income of £258.8 million in 2024, while CIMA and ICAEW showed the most substantial income growth [4] Regulatory Developments - The FRC has initiated a public consultation on proposed improvements to its Audit Enforcement Procedure, seeking stakeholder feedback until January 9, 2026 [5]

Workforce Adjustment - KPMG's US audit business has reduced its workforce by 195 employees [1] - The reduction aims to address low employee turnover rates [1] - Changes in how KPMG conducts its core business contributed to the workforce adjustment [1]

Core Insights - The recent ASIC report highlights the need for improved auditor independence and compliance with conflict of interest rules, serving as a catalyst for positive change in the audit industry [1][4] Group 1: ASIC Report Findings - ASIC oversees less than 3,200 Registered Company Auditors (RCAs), with a review of 109 auditors revealing 15 likely breaches of independence obligations [2] - Issues with auditor rotation rules were significant, with nine out of the 15 auditors identified breaching mandatory rotation periods [2] Group 2: Recommendations and Industry Response - CPA Australia advocates for a comprehensive evaluation of threats to independence and the implementation of safeguards, emphasizing the need for enhanced documentation and communication regarding independence assessments [4] - The organization supports cooperation between ASIC and professional bodies to strengthen ethics and independence through education and updated guidelines [4] Group 3: Complexity of Independence Requirements - The independence requirements are complex, involving legislation, ethical codes, and auditing standards, designed to address both actual and perceived conflicts [5] - CPA Australia emphasizes the importance of continuous improvement in auditor practices rather than alarm over the findings [5]

Core Viewpoint - The Financial Reporting Council (FRC) is conducting a public consultation to enhance its Audit Enforcement Procedure (AEP), aiming for timely regulatory responses and stakeholder engagement [1][3]. Group 1: Consultation Details - The consultation will remain open until 9 January 2026, inviting feedback from various stakeholders including audit committees, audit firms, investors, and professional bodies [1]. - The proposed enhancements include three additional resolution methods, expanding the FRC's options to five pathways for addressing breaches of auditing and ethical standards [2]. Group 2: Proposed Changes - The revisions aim to provide a more graduated approach to enforcement, allowing the FRC to tailor responses based on the specifics of each case [2]. - New methods include Published Constructive Engagement, an Accelerated Procedure, and an Early Admissions Process, set to be implemented from 1 July 2026 [3]. Group 3: Strategic Alignment - This initiative aligns with the FRC's Future of Audit Supervision Strategy (FASS), launched in August 2025, to refine audit supervision practices [3]. - The FRC's CEO emphasized the importance of maintaining efficiency, effectiveness, and public trust in the enforcement processes [4]. Group 4: Recent Updates - In September 2025, the FRC updated its International Standards on Auditing (UK), which included amendments affecting quality control processes for audit firms [5].

Core Insights - Worldline has appointed Srikanth Seshadri as the new CFO effective September 8, succeeding Gregory Lambertie, who left for other opportunities [5] - Seshadri brings 23 years of experience from Alstom, where he was vice president of treasury and financing, and has a background in auditing from Arthur Andersen [4][5] - The leadership changes are part of Worldline's strategy to enhance cash flow and focus on its core payments business, following a dip in free cash flow in the first half of 2025 [6] Company Strategy - Worldline aims to bolster its cash flow and streamline operations, with a focus on transforming the company to achieve growth and cash flow generation [5] - The company is divesting certain assets, including entering exclusive talks with Magellan Partners for the sale of its Mobility & e-Transactional Services business line, with a proposed enterprise value of €410 million expected to close by H1 2026 [6] Executive Leadership Changes - Alongside Seshadri, Anika Grant has been appointed as chief people officer and Madalena Cascais Tomé as head of financial services, both effective in September and October respectively [5] - These new leaders will join Worldline's executive committee to drive the transformation agenda and meet investor expectations [5]