Accountants BDO, Forvis Mazars told to 'urgently' improve in Britain

LONDON, July 30 (Reuters) - Britain's accounting watchdog said on Tuesday its annual spot checks of company audits uncovered a sharp drop in quality at BDO and Forvis Mazars that must be "urgently addressed".

The Financial Reporting Council (FRC) said its annual review of audit quality among the top accounting firms operating in Britain showed that overall 74% of audits by top accountants were 'good' or required only limited improvements.

However, for BDO this fell significantly year on year to 38% from 69%, while Forvis Mazars’ results declined from 56% to 44%.

BDO and Forvis Mazars had no immediate comment.

"Disappointingly, BDO and Forvis Mazars’ performance has fallen significantly below our expectations," Sarah Rapson, the FRC's executive director of supervision, said in a statement.

"Both firms are strategically important to the UK audit market and the wider UK economy, so it is vital that they deliver on their agreed improvement plans. The FRC’s supervisory work with these two firms will continue to focus on these improvements."

The "Big Four" audit firms, EY, KPMG, Deloitte and PwC, which dominate auditing of big companies, continued with the improving trend of recent years, with scores of 76%, 89%, 94% and 76% respectively this year, the FRC said.

Policymakers have been pinning their hopes on BDO and Forvis Mazars to provide more competition to dent the Big Four's dominance. (Reporting by Huw Jones; Editing by Mark Potter)