Many of the measures the FRC is proposing are issues that ACCA flagged as concerns for businesses, auditors and regulators. Although the FRC’s report SME Market Study found a well-functioning market, ACCA agrees with the proposals to deal with challenges around regulation, supervision, technology and effective audits.

ACCA will continue to work with the FRC to improve the regulatory requirements and the supervisory environment. In particular, ACCA is pleased to see that the FRC will consult on the IAASB’s International Standard on Auditing for Audits of Financial Statements of Less Complex Entities.

Maggie McGhee, executive director – strategy and governance, ACCA, said: “ACCA believes securing stakeholder feedback in the UK would show the depth of feeling that exists across the profession about the need for a more scalable, proportionate approach to auditing and reporting on smaller and less complex businesses.”

ACCA continually emphasises how ethics is at the core of audit, so the FRC’s commitment to provide further guidance on the application of the ethical standard will be welcomed by our members.

Glenn Collins, head of technical and strategic engagement ACCA UK, said: “The FRC’s comment on the ethical standard comment is welcome as it does continue to cause issues and confusion. A change and further practical guidance should help support auditors, increase auditor choice and make a difference to the advice SMEs receive.”

As a Recognised Supervisory Body (RSB) ACCA has said it is pleased to join the FRC’s working party tasked with identifying and implementing changes to the supervisory approach in a bid to achieve a more consistent, risk-based and proportionate approach inspection of SME audits.

Ms McGhee added: “The UK SME audit market is of critical importance and working together we can ensure that this is supported both now and in the future.”