The association found that the most common problem among the 3,400 firms - 75 per cent of which are sole practitioners - it monitors under the 1989 Companies Act was a lack of proper record keeping.
Too much information is retained in the individual auditor's head, making it difficult to discover work has been done, it said.
Other problems found in the firms, which mainly audit small companies, were failure to plan work effectively and lack of distinction between accounting and auditing objectives.
There was also criticism of the consideration given to the future viability of businesses.
Twenty-three of the 297 firms it visited in the year to the end of September were found to have committed such serious breaches of the rules that immediate action was required. Two individuals were expelled from the association, four firms had their auditing certificates withdrawn and five have agreed to stop audit work. Three cases have been settled and a further nine are pending.
In addition, 59 firms have been warned that they may lose their registrations if they are found to be unsatisfactory by a follow-up inspection in the next two years.
The association's monitoring unit evaluates quality controls and carries out detailed inspections of completed audit files.
Last month the English, Scottish and Irish institutes of chartered accountants, which represent the larger firms, reported that only 11 of the 158 practices visited had passed all their tests of audit practice. But the report said this indicated procedural errors rather than a general shortfall in the quality of audit work.
Anthony Booth, the Chartered Association of Certified Accountants' under-secretary, reiterated the institutes' view that a large part of the monitoring bodies' role was to educate auditors.
Through combining this with disciplinary action standards would improve, he said.Reuse content