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The Financial Reporting Council (FRC) has opened a second consultation on revisions to two auditing standards following feedback from stakeholders during the previous year.
The accounting watchdog is proposing updates to ISA (UK) 250 and ISA (UK) 270 to ensure auditors take a proportionate approach when engaging with entities.
The revisions to ISA (UK) 250 introduce a risk-based approach to audit work regarding laws and regulations, focusing on material misstatements caused by non-compliance.
The regulator has removed the distinction between direct and indirect laws, focusing instead on regulations that are fundamental to how an entity operates.
Under the new proposals, the council clarified that auditors will not normally require specialist legal expertise to meet the requirements of the updated standard.
ISA (UK) 270 will be renamed and renumbered to become more principles-based, making it clear that reporting obligations can arise across any area of an audit.
The revised standard aims to provide clarity on which authorities auditors should report to and confirms that they may need to report to multiple bodies simultaneously.
The regulator is also seeking feedback on these targeted proposals to support high-quality audits without placing unnecessary burdens on the entities being audited.
The Financial Reporting Council is requesting comments on the re-consultation by 21 May 2026.
Richard Moriarty, executive director of the FRC, said: “These proposals build directly on stakeholder feedback from the initial consultation and are designed to deliver targeted, proportionate standards.”
