Is audit reform finally coming and will you make your voice heard?

Talk of changing the audit regime has been ongoing, but very often fails to result in significant overhauls.

There are plans and proposals, but delays and setbacks can make it seem like the way audits are conducted is set in stone and unlikely to change.

However, there is a sign that things may be changing soon, so it is time to understand what could be coming and how it will impact your business.

What audit reforms are being considered?

If you have been keeping pace with audit news, most likely because you have to get an audit for your business, you may remember that there was a big announcement in 2019.

The plan was to replace the Financial Reporting Council (FRC) with the Audit, Reporting and Governance Authority (ARGA).

That never came to pass and ARGA’s roll-out still remains uncertain.

In its stead, the FRC has opened a public consultation to identify the practical problems that still blight audit practice and to test alternative enforcement routes.

There is an understanding that the current binary approach to adult resolutions is inefficient and can be a source of frustration for businesses caught out by lengthy investigations.

The public consultation proposes moving away from the options of either a private constructive engagement or a full, lengthy investigation on the other, towards a more graduated set of responses.

The FRC has outlined three possible routes intended to clarify and speed up resolutions:

• A published constructive-engagement option that makes certain regulatory interventions public so the profession can learn lessons.
• An accelerated procedure where there is clear evidence or an admission of failings, allowing for quicker closure.
• An early-admissions process in which firms carry out reviews under FRC oversight and accept responsibility in return for an expedited resolution.

The intention is to give regulators more proportional tools that will allow for swifter, targeted interventions where appropriate.

This means that full investigations will be reserved for only the most serious cases of public interest, ensuring that smaller discrepancies can be dealt with more effectively.

Businesses are likely to benefit from this as drawn-out probes are disruptive, expensive and distracting, so a clearer range of lighter-touch options may reduce the regulatory burden.

What should businesses do now to prepare for potential audit reforms?

We bring this to your attention as the public consultation is still ongoing.

The FRC is inviting responses by 9 January 2026 and it has indicated that, subject to consultation feedback and necessary implementation work, a revised Audit Enforcement Procedure could take effect from 1 July 2026.

If you have concerns about how audits are carried out, whether those concerns centre on delays, poor communication, weak challenges or anything else, now is the time to make them known.

If your current audit experience feels unsatisfactory, use the consultation to describe practical examples and suggest improvements.

Constructive feedback from businesses will help the regulator design a system that works better in practice and it will give you more awareness of how enforcement might change.

Be sure to respond to the consultation before the deadline to have your say.

Even if you don’t plan to submit a response, treat the consultation as a timely nudge to get audit-ready.

If you expect an audit in the coming year, then you can take this as a sign to start preparing.

To avoid delays with the auditing itself, you should take the time to gather supporting documents, review past audit recommendations and ensure actions have been taken.

This will avoid problems of the past from resurfacing.

Proactive preparation reduces the risk of routine matters escalating into regulatory scrutiny, which still currently involves the inefficient binary system.

We’ll support you in getting ready for audits and in acting on any findings efficiently.

Our team can review your processes, assemble the records auditors will want to see and help implement any recommendations.

We will also keep you updated on how the consultation pans out and what changes are going to be introduced.

If ARGA ever does get further consideration, we will let you know, but for now, let us help you prepare for the FRC’s upcoming reforms.

For help preparing for audits now and in the future, be sure to speak to our team today.