October 3, 2022

And the Award for Most Innovative Audit Goes To…

The Investment Management Association (UK) recently held its inaugural Auditor Reporting awards and you'll be happy to hear three of the Big 4 were recognized for excellence in audit (I know you want to make a radio station joke here but read on and you KPMG haters will be disappointed):

The awards were set out in two main categories: most insightful auditor's report and most innovative. The insightful category recognises the reports that provide the most entity specific and enlightening information, giving investors hooks on which to engage further with the audit committee. The innovative category acknowledges reports which thought differently about how to present findings so that they were set out in the most engaging and readable way. Each award had three sub-divisions: FTSE 100; FTSE 250; and FTSE Small Cap and AIM, with runners up also commended.

Innovative and audit aren't two words that you usually want to see together, but in this case KPMG took home the prize for their much talked about Rolls Royce audit that may just signal a transition to the audit of the future.

When the long form audit report was revealed earlier this year, KPMG UK head of audit Tony Cates said “If we truly want audit to make a difference, not only do we have to ask these challenging questions, but offer bold answers – daring to think differently.” Wanting audit to make a difference is certainly thinking differently, we'll give him that.

Award winners are as follows. Check out that sweep by KPMG!

FTSE 100

Winner – Rolls-Royce Holdings Plc (KPMG)
Commended – Standard Chartered Plc (KPMG) and Vodafone Group Plc (Deloitte)

Winner – Smiths Group Plc (PwC)
Commended – ITV Plc (KPMG)

FTSE 250

Winner – Rathbone Brothers Plc (KPMG)
Commended – Kazakhmys Plc (KPMG)

Winner – J D Wetherspoon Plc (PwC)
Commended – Merlin Entertainments Plc (KPMG)

FTSE small cap and AIM

Winner – Stobart Group (KPMG)
Commended – New World Resources Plc (KPMG)

Winner – Petropavlovsk Plc (Deloitte)

You may not have gotten this memo but earlier this year, the Financial Reporting Council came up with requirements that ask more out of auditors of UK listed companies. According to IMA Chief Executive Daniel Godfrey, "the success of the new audit standard is of paramount importance to the investment industry." As such, the awards are "held in recognition of this alongside commending greater transparency and excellence in auditor reporting and supporting the industry's progress." In other words, here's a cookie.

I don't know about you guys but I'd love to see something like this here. Such as "Fewest Deficiencies in Auditing Standard No. 5" and "Least Embarrassing Audit Failure Rate for a Mid-Tier Audit Firm." The possibilities are endless.

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