The Financial Reporting Council (FRC) has launched the collaborative Innovation and Improvement Hub to establish an exploratory environment. 

The move is aimed at encouraging joint problem-solving among market participants, promoting “high standards” and contributing to economic growth.  

This initiative integrates various FRC programmes such as the Audit Sandbox and Scalebox programmes into a cohesive framework, enhancing stakeholder access to regulatory support. 

The hub’s primary objective is to offer stakeholders alternative methods to engage with regulatory support, extending beyond conventional supervisory interactions.  

It is designed to facilitate discussions that focus on mutual interests and to promote advancements within the sector. 

For its initial phase, the FRC has pinpointed three key areas of focus for the hub. These are exploring the implications of AI for future auditing processes; collaborating with businesses to manage the increasing complexity of annual reports and accounts; and strengthening cooperation across regulatory bodies to achieve a unified approach within the regulatory environment. 

FRC CEO Richard Moriarty said: “There is an important role for regulators to encourage improvement and enable innovation. The Innovation and Improvement Hub demonstrates our commitment to provide a space for industry participants to experiment and discuss issues, so we can drive innovation and support growth across the sector whilst maintaining our focus on quality and market resilience. 

“The Hub’s broader innovation agenda complements the FRC’s recent work to reduce reporting requirements, including the updated UK Stewardship Code 2026, which introduced fewer principles for asset managers and more flexible reporting structures, alongside ongoing efforts to help auditors deliver more proportionate audits for small and medium-sized enterprises.” 

Recently, the FRC introduced the Scalebox programme, which aims to help smaller audit companies enhance their quality management systems. This aids those companies in improving their capabilities and provides the FRC with insights into effective regulation for smaller entities operating in the Public Interest Entity market.