Register to get free articles
Want unlimited access? View Plans
Already have an account? Sign in
The Association of Chartered Certified Accountants (ACCA) has pledged to collaborate with the Financial Reporting Council to address regulatory and supervisory challenges within the United Kingdom’s small business audit market.
The move follows the publication of the FRC’s SME Market Study, which, while finding the market generally functional, identified necessary improvements in technology, supervision, and effective audit delivery.
A key component of the proposal includes a consultation on the International Auditing and Assurance Standards Board (IAASB) standard for audits of less complex entities.
ACCA, acting as a Recognised Supervisory Body (RSB), will join a dedicated FRC working party to implement a more risk-based and proportionate approach to SME audit inspections.
The FRC has also committed to providing further guidance on the application of ethical standards.
This transparency is intended to reduce confusion among practitioners and increase auditor choice for smaller enterprises.
Additionally, by focusing on scalability and proportionality, the regulator aims to ensure that audit requirements do not place an undue burden on less complex businesses while maintaining the integrity of financial reporting across the sector.
The collaboration is expected to influence the future of the supervisory environment in the UK.
Industry engagement will focus on how technology can be leveraged to streamline audit processes for smaller firms.
According to ACCA, the goal of the partnership is to ensure the UK SME audit market remains “resilient and capable of providing high-quality advice to the millions of small businesses that form the core of the national economy”.
Maggie McGhee, executive director of strategy and governance at ACCA, said: “ACCA believes securing stakeholder feedback in the UK would show the profession’s view on the need for a scalable, proportionate approach to auditing and reporting on smaller and less complex businesses. The UK SME audit market is of importance and working together we can ensure that this is supported both now and in the future.”
Glenn Collins, head of technical and strategic engagement at ACCA UK, added: “The FRC’s comment on the ethical standard is welcome as it continues to cause issues and confusion. A change and further practical guidance should help support auditors, increase auditor choice and make a difference to the advice SMEs receive.”
