The work of the audit company KPMG, one of the four leading global companies in the field, came under harsh criticism of the industry’s watchdog, the British Financial Reporting Council (FRC), BBC reported on Tuesday.

Audits performed by KPMG have shown signs of “unacceptable deterioration” and will in future be under closer supervision, FRC said.

FRC added that the other three major audit companies, PricewaterhouseCoopers (PWC), Ernst & Young (EY), and Deloitte, must also undertake steps as soon as possible to reverse the trend of poor results if they wished to achieve the goals set by the watchdog.

KPMG said they were disappointed with the findings and they were taking steps to improve their audit quality.

Over the last few years, audit companies have faced a barrage of criticism over the credibility of their assessments of companies’ financial health.

Each year, the British watchdog analyses the audits from those four biggest companies to ensure they meet certain standards. Problems were visible in the work of all four companies, but the poor audit quality of KPMG stood out the most.

“In one audit company, KPMG, an unacceptable deterioration in audit quality was noticed,” the FRC press release said.

“Half of the KPMG’s FTSE 350 audits require more than just limited improvements, compared to the 35 percent in the last annual report,” FRC said.

“Currently, the people’s trust business and audit is at the centre of attention, so the Big Four must improve the quality of their audits, and they must do it quickly,” said the head of FRC, Stephen Haddrill.

“They must immediately deal with certain key factors for audits, including levels of challenge and scepticism of the auditors, primarily in their bank audits,” he added.

The increased supervision of KPMG will include inspecting an additional 25 percent audits the company will do in the financial year 2018-19, which is the first time the FRC did something like this.

KPMG was criticised this year because of their audit reports for the failed construction company Carillion, and the FRC opened an investigation in the group. Recently, KPMG was fined £3.2 million over its audit of the insurance company Quindell, and last year, the FRC opened an investigation into the KPMG’s audit of the aircraft engines manufacturer Rolls-Royce.

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