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Staff Guidance Note: The impact of early adoption of ISA (UK) 700 (Revised September 2026) on auditor’s reports

Financial Reporting Council

The FRC does not accept any liability to any party for any loss, damage or costs howsoever arising, whether directly or indirectly, whether in contract, tort or otherwise from any action or decision taken (or not taken) as a result of any person relying on or otherwise using this document or arising from any omission from it.

The Financial Reporting Council Limited is a company limited by guarantee. Registered in England number 2486368. Registered Office: 13th Floor, 1 Harbour Exchange Square, London, E14 9GE

Introduction

1In May 2026, the Financial Reporting Council (FRC) Board approved the issuance of the following revised ISAs (UK):

ISA (UK) 700 (Revised May 2026) Forming an opinion and reporting on financial statements.
ISA (UK) 701 (Revised May 2026) Communicating key audit matters in the independent auditor.
ISA (UK) 720 (Revised May 2026) The auditor's responsibilities relating to other information.

2These revised standards are intended to simplify and declutter the auditor's report, and in so doing reduce reporting burdens for both auditors and users of audited financial information, and to increase the quantity of useful information for users within the auditor's report.

3All three revised standards specify an effective date for audits of financial statements for periods commencing on or after 15 December 2026. Early adoption is permitted for one or more of these standards. Where a standard is adopted, all requirements within that standard must be complied with.

4The FRC understands that auditors may wish to early adopt ISA (UK) 700 (Revised May 2026) to simplify auditor reporting in line with the intention of the changes to this standard. However, early adoption raises several issues for which auditors need to be aware.

5This guidance is intended to support auditors by both identifying these issues and setting out practical steps to address them. The three areas are:

The duty to report the extent to which the audit was considered capable of detecting irregularities, including fraud;
The auditor's responsibility to report on matters relating to going concern; and
Cross-referencing to the appropriate version of the ‘Description of the Auditor's Responsibilities for the Audit of the Financial Statements'.

Duty to report the extent to which the audit was considered capable of detecting irregularities, including fraud

6As a result of the revised standards, the auditor will no longer be required to include in all auditor's reports an explanation of the extent to which the audit was considered capable of detecting irregularities, including fraud. This requirement, set out in ISA (UK) 700 (Revised November 2019) paragraph 29-1, has been removed from ISA (UK) 700 (Revised May 2026). Instead, it will only be applied to audits of entities included within the scope of ISA (UK) 701 (Revised May 2026).

7Law and regulation require the auditor to provide this description for audits of certain types of entities. The auditor ensures compliance with these requirements by continuing to include this description in auditor's reports for audits of public interest entities and publicly traded entities where ISA (UK) 700 (Revised May 2026) has been early adopted. ¹²

The auditor's responsibility to report on matters relating to going concern

8ISA (UK) 700 (Revised May 2026), paragraph 29, requires auditors to report in accordance with ISA (UK) 570 (Revised March 2026). However, early adoption is not permitted for this ISA (UK).

9The auditor therefore continues to report in accordance with the requirements in ISA (UK) 700 (Revised November 2019) to support early adoption of ISA (UK) 700 (Revised May 2026).

Cross-referencing to the appropriate version of the ‘Description of the Auditor's Responsibilities for the Audit of the Financial Statements'

10The auditor is permitted to include a cross-reference to a description of the auditor's responsibilities for the audit of the financial statements that is maintained on the FRC's website in accordance with paragraph 41 of ISA (UK) 700. That description is maintained by the FRC to reflect the auditing standards in force at the time the website is accessed. A new draft statement of auditors' responsibilities, reflecting the impact of the changes to ISA (UK) 700, ISA (UK) 701, and ISA (UK) 720, was published in PDF at the same time as the revised standards were published in June 2026, and will become the statement included on the FRC's website from 15 December 2026.

11Early adoption of ISA (UK) 700 (Revised May 2026) gives rise to misalignment between the current wording on the FRC website and the auditing standards, as well as the draft statement of the auditor's responsibilities published in June 2026.

12The FRC will therefore issue an interim statement of auditor's responsibilities to support early adoption of ISA (UK) 700 (Revised May 2026). This may be found at the following web address: https://www.frc.org.uk/library/standards-codes-policy/audit-assurance-and-ethics/auditors-responsibilities-for-the-audit/auditors-responsibilities-for-the-audit-interim/. This statement is only suitable for audits where ISA (UK) 700 (Revised May 2026) alone has been early adopted.

Withdrawal of this guidance

13This guidance is intended to provide support solely for early adoption of ISA (UK) 700 (Revised May 2026). After 15 December 2026, this standard, alongside the revised versions of ISA (UK) 701 and ISA (UK) 720, will be mandatory for all audits of financial statements performed in accordance with the ISAs (UK). This guidance will therefore cease to be relevant following the completion of audits where the period begins before this date, and after the appropriate deadline for filing the audited financial statements at Companies House. Accordingly, the FRC intends to withdraw this guidance during 2029.

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Footnotes

ISA (UK) 700 (Revised November 2019), paragraphs A39-1–A39-6, provides application material to support auditors in providing this description. ↩
In line with the narrow scope amendments arising from the IAASB's PIE Track 2 project, ‘listed entity’ will be superseded by ‘publicly traded entity’ with effect from 15 December 2026. While the FRC’s Ethical Standard will continue to use ‘listed entity’ as a category, we have clarified that we consider ‘listed entity’ to be directly equivalent to ‘publicly traded entity’. See FRC, Enhanced auditor reporting – Feedback statement: Revisions to ISA (UK) 700, ISA (UK) 701, and ISA (UK) 720 (June 2026), p. 17. ↩

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Name Staff Guidance Note: The impact of early adoption of ISA (UK) 700 (Revised September 2026) on auditor’s reports