The Financial Reporting Council (FRC) has published a summary of key findings and potential actions from research it commissioned into barriers to entry and growth faced by audit firms in the UK.

The report highlighted capacity constraints, recruitment and retention challenges, alongside regulatory requirements, as the main obstacles for smaller firms looking to expand their presence – especially in audits of public interest entities (PIEs).

To promote greater competition and choice in the audit market, the FRC has highlighted the importance of a collaborative, cross-system approach involving the regulator, audit firms, professional accounting bodies, and government. The FRC itself has already launched initiatives like Scalebox to help smaller firms understand regulatory standards and grow their PIE audit capabilities.

Audit firms are encouraged to prioritise cultures that better support their staff, including training and resources, while professional accounting bodies should continue efforts to attract new talent into the profession and maintain high auditing standards. Government can also play a role with policies that encourage competition and innovation in the audit market.

Commenting on this, FRC executive director of regulatory standards, Mark Babington, said: “While ensuring high standards of audit quality is paramount, a resilient, competitive audit market is crucial for upholding the UK’s status as a leading financial centre and protecting the public interest. The research makes clear that tackling the barriers to audit firm growth requires a co-ordinated approach to foster an environment that supports sustainable growth at all audit firms, greater capacity and choice in the market while maintaining high standards.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.