In the opening vignette and Auditing in Action 7-1 , we referred to the Financial Reporting Council ("FRC"), the United Kingdom's independent regulator responsible for promoting high-quality corporate governance and reporting to foster investment. The council sets standards for corporate reporting, audit, and actuarial practice and monitors and enforces accounting and auditing standards. During 2013, the council's audit quality review team issued a report based on its inspection and review of the six largest audit fi rms' audit methodologies and guidance in respect of materiality.
REQUIRED
Obtain and review the report. The report can be accessed on the FRC website at www.frc.org.uk . Provide a supported discussion on the role that you think "professional judgment" plays in setting materiality at the accounting firms that were inspected by FRC. Include in your discussion your thoughts on what shapes the audit methodology and guidance in relation to materiality at those firms.