Register to get free articles
Want unlimited access? View Plans
Already have an account? Sign in
The Financial Reporting Council (FRC) has launched a public consultation on changes to the way it handles potential breaches of auditing and ethical standards, proposing new measures intended to speed up and diversify enforcement.
The consultation, which runs until 9 January 2026, forms part of the regulator’s end-to-end review of its Audit Enforcement Procedure. Final changes would come into effect on 1 July 2026.
The FRC currently has two enforcement routes: private constructive engagement with audit firms or a full investigation. It is proposing to expand this to five options by adding three new mechanisms – published constructive engagement, an accelerated procedure and an early admissions process.
The regulator said the reforms were designed to allow for “more proportionate and timely action” while preserving the robustness of existing investigations.
Under the proposed published constructive engagement model, certain regulatory interventions would be made public to help others in the profession learn from identified issues. The accelerated procedure would be used where there is clear evidence or admission of failings, while the early admissions process would allow firms to conduct their own reviews under FRC oversight and acknowledge breaches.
The review sits alongside the FRC’s Future of Audit Supervision Strategy, launched in August, which seeks to update its supervisory approach to support a resilient audit market.
Richard Moriarty, chief executive of the FRC, said: “We’re proposing a graduated set of interventions that would expand the range of tools we have to take more proportionate and timely action while maintaining our ability to conduct thorough investigations where needed.”
According to Moriarty, the reforms were intended to ensure the regulator’s procedures “remain efficient, effective and proportionate, but also that they continue to maintain trust and confidence as we serve the public interest”.
The watchdog said it was particularly seeking responses from audit committees, investors, firms, professional bodies and users of audited financial statements.
The FRC will also hold a webinar on 8 October to discuss the proposals, with senior officials including Elizabeth Barrett, executive director of enforcement, and Anthony Barrett, director of audit quality review.
