The UK Financial Reporting Council (FRC) has published guidance on how auditors should apply standards in a proportionate and effective when conducting an audit of SMEs’ financial statements.
The regulator has also released the findings of its study on the SME audit market. It found that the market is “broadly functioning well, with strong competition and good availability of audit services”.
Moving forward, the FRC has announced a package of further measures to support SMEs and their auditors.
It will:
- Launch an engagement programme with auditors on the new guidance
- Develop a technology sandbox to help smaller audit firms adopt AI and new technology
- Establish a working group with the supervisory authorities to promote consistency in SME audit supervision
- Engage with stakeholders on the international ‘Less Complex Entities’ auditing standard
FRC CEO Richard Moriarty stated: “We’re already beginning to implement changes to support more proportionate audits of SMEs where we can and will continue working with other regulators to ensure they too can support this change.”
Companies:UK Financial Reporting Council
People:Richard Moriarty