Key facts
- BDO has been flagged for unacceptable audit quality by the FRC for five consecutive years.
- Fifty percent of BDO's audits in the 2025/26 cycle required improvement.
- The FRC will increase its audit inspections of BDO.
- BDO was previously fined £6.5 million for faking audit evidence.
- BDO and a former partner were fined £2 million for breaches during the 2019 audit of NMCN.
Accountancy firm BDO has been cited for an "unacceptable" standard of audit quality by the Financial Reporting Council (FRC) for the fifth consecutive year. The FRC's annual audit quality report indicated that BDO's overall audit quality fell below expected standards, with the firm consistently receiving unsatisfactory results from regulatory inspections.
In the 2025/26 cycle, 50% of BDO's 14 inspected audits required improvement, and one audit needed significant remediation. While the FRC acknowledged minor improvements in certain areas, the firm's overall audit quality has not met the required levels. The regulator plans to increase the frequency of its inspections at BDO and implement targeted follow-up assessments.
Dominic Stammers, head of audit at BDO, acknowledged that "more work to do to achieve consistent high quality across all our audits" and committed to strengthening the firm's quality management system.
BDO has faced previous penalties from the FRC. In November, the firm was fined £6.5 million for fabricating audit evidence, a case that involved a senior manager's dishonest conduct between 2015 and 2019. This fine was reduced to £5.8 million after a 10% reduction, and BDO also paid £716,000 in costs. In May, the FRC imposed a £2 million fine on BDO and the former head of its London audit group, Geraint Jones, for serious breaches during the 2019 statutory audit of construction engineering firm NMCN.