Audit Quality Monitoring Report

View PDF version(259 KB)

Going forward

  1. The Government’s consultation on the plans to overhaul the local audit system closed on 29 January 2025. The cornerstone of the planned reform is the establishment of a single co-ordinating body, the Local Audit Office (LAO). The LAO will have a focussed and clear remit to lead the required reform to tackle the three systemic challenges identified by MHCLG:
  • Capacity – a severe lack of auditors with a limited number of firms operating in the sector;
  • Co-ordination – multiple organisations with a statutory role to oversee and regulate audit, across various sectors, countries and with responsibilities for different frameworks. There is no clear ownership of the system which limits the ability to align incentives and establish a single vision; and
  • Complexity – financial reporting audit requirements are disproportionately complex, beyond the system’s capacity and inadvertently incentivises risk aversion. Standards are largely modelled on corporate audit rather than the needs of local audit bodies.
  1. We look forward to working with system partners to develop a more cohesive system of local audit that is both geared to the sector’s needs, and that provides the necessary assurance over the use of public money. 

Back to top

Previous