2024 Audit Trust Index
Audit plays a critical role in the UK’s capital markets by underpinning confidence in Britain’s largest companies and shaping investor decision-making. This confidence has been fractured since 2018 with a number of high-profile corporate failures, highlighting the need to better safeguard the interests of financial stakeholders and broader society. Much positive action has happened across the audit and regulatory landscape over the last six years but there is more still to do.
As an autonomous research and policy institute we bring together leaders from across the profession to support reform, shape best practice in UK public interest entity (PIE) audits, and drive meaningful change. It is essential, therefore, to understand how PIE audits are perceived by key stakeholder groups. Our annual Audit Trust Index will understand and track this sentiment in detail over time.
Explore our findings
Majority express satisfaction with external audit firm’s overall quality
A strong majority of audit committee chairs (94%) indicated they were either very satisfied or somewhat satisfied with audit quality, along with 86% of finance directors and 77% of investors. While the results reflect a generally positive view, we recognise that some stakeholders continue to voice concerns that audit quality still has room for improvement.
Key takeaway
The level of auditor challenge and the extent to which this is made clear in audit reporting is a common factor underpinning satisfaction levels with audit quality. Through its forthcoming roundtables with investors and audit committee chairs, the CPIA will explore how the level of challenge on key judgements and risks can be made more visible as part of the reporting process.
Explore our findings
Strong levels of confidence in auditors’ independence and objectivity
The survey results reveal a high level of confidence in auditors’ independence and objectivity among respondents. While this is encouraging, it does not lessen the audit profession’s responsibility to uphold its independence, both in actuality and public perception. This calls for an ongoing, proactive commitment to upholding and strengthening ethical standards.
Key takeaway
We urge stakeholders across the market to ensure that work on ongoing reform will recognise the progress that has already been made to strengthen existing rules governing the provision of non-audit services by auditors. Future legislation should reflect the developing needs of the market for non-financial assurance services to be provided alongside audit.
Strong confidence in auditors’ handling of fraud risks among audit committee chairs and finance directors
A strong majority – over three-quarters of respondents across all stakeholder groups – express confidence in auditors’ handling of fraud risks. However, 15% of investors and 14% of finance directors neither agreed nor disagreed, reflecting a degree of uncertainty or ambivalence around auditors’ effectiveness in addressing fraud risks. This demands closer examination.
Key takeaway
Over the course of the next year, the CPIA will undertake a further study testing perceptions around the role of the auditor on addressing the risks of fraud. Understanding whether this neutrality stems from insufficient information, varied experiences or other factors can help refine audit practices and further improve transparency.
