Accounting regulator the Financial Reporting Council (FRC) has announced plans to enhance its monitoring of the six largest audit firms to avoid systematic deficiencies within firms’ networks, disruption in the provision of statutory audit services and instability in the financial sector.

The FRC will set out its expectations of each audit firm and use evidence it gains to inform its supervision programme for these firms and will focus its attention on five key pillars that are critical to the stability of the audit firms and quality of audit work.

These are: Leadership and governance; Values and behaviours; Business models and financial soundness; Risk management and control; and Evidence on audit quality, including from the FRC’s annual programme of audit quality reviews.

The FRC says it has begun work on monitoring risk reporting, contingency planning and IT security at audit firms and will report to the firms on its findings on all the five pillars. The results of the FRC’s inspection of audit quality by the firms will be published in firm-specific reports in June and summarised in the annual Developments in Audit report in July.

It’s about time a meaningful approach to addressing audit failure was put in place- although it comes late in the day to salvage the FRC’s reputation.