The Financial Reporting Council (FRC) has opened a public consultation on proposed enhancements to its Audit Enforcement Procedure (AEP) to review its mechanisms.
Set to remain open until 9 January 2026, the consultation invites comments from stakeholders on amendments aimed at providing “timely regulatory responses”.
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The stakeholders include audit committees, audit firms, investors, professional bodies, and those who utilise audited financial statements.
The revisions suggest three additional resolution methods to the existing options, increasing the FRC’s toolkit to five potential pathways for addressing potential breaches of auditing and ethical standards.
The current enforcement framework allows the FRC to either engage privately with audit firms or initiate a full investigation.
The suggested changes are intended to offer a more graduated approach, enabling the FRC to tailor its response to the circumstances of each case.
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By GlobalDataThis consultation is part of the FRC’s aim to refine its audit supervision, aligning with the Future of Audit Supervision Strategy (FASS) that was launched in August 2025.
The proposals include Published Constructive Engagement, an Accelerated Procedure and an Early Admissions Process.
The updated procedures are set to come into effect from 1 July 2026.
FRC CEO Richard Moriarty said: “The FRC’s revision of its end to end enforcement processes has looked at our enforcement procedures from end to end to make sure that they remain efficient, effective and proportionate, but also that they continue to maintain the trust and confidence as we serve the public interest.
“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.”
In September 2025, the FRC updated its International Standards on Auditing (UK), incorporating amendments that affect quality control processes for firms conducting audits and related services.
