The Financial Reporting Council (FRC) has published the Audit Quality Inspection Report for 2012/13 which provides an overview of the audit quality inspection work carried out by its Audit Quality Review (AQR) team. The report provides an assessment of audit quality and also provides key messages that audit firms should pay attention to if they are to improve their overall level of audit quality. The report indicates that there has been an improvement in the overall standard of audit work subject to inspection. However the report also highlights that there has been an increase in the proportion of audits of entities outside of the FTSE 350 as requiring significant improvements. Findings also indicate that there is a need for firms to increase their focus on professional scepticism and the effectiveness of their independence and ethical policies and procedures.