Audit Enforcement Procedure (effective until 30 June 2026)
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Notice
This version of the AEP is effective until 30 June 2026. For the effective version from 1 July 2026, see:
Introduction
In June 2016, the FRC became the 'competent authority' for audit in the UK under new legislation which came into force following the EU Audit Regulation and Directive.
Enforcement action is taken under the FRC’s Audit Enforcement Procedure (AEP). On this page we set out:
- the scope of the AEP
- an outline of the AEP process
- the AEP itself and other supporting documents.
Scope of the AEP
The FRC will investigate matters relating to the audits of:
- Public Interest Entities (PIEs), being listed entities, credit institutions and insurance undertakings
- AIM-listed companies with a market capitalisation in excess of €200m
- Lloyds Syndicates.
Other audit-related investigations have been delegated to the Recognised Supervisory Bodies (RSBs), such as the Institute of Chartered Accountants for England and Wales, but the FRC can reclaim an investigation from an RSB if it chooses to do so.
Outline of the AEP process
There are up to four stages of an AEP investigation:
- Initial enquiries: these are conducted by the Case Examiner and may result in a referral to the FRC’s Board or Conduct Committee to decide whether the matter should be referred to the FRC’s Executive Counsel to investigate. The Conduct Committee will also decide whether the fact of an investigation is to be published.
- Investigation: Executive Counsel’s investigation will be conducted by an in-house team of lawyers and forensic accountants, culminating in an Investigation Report. At the conclusion of the investigation, Executive Counsel will issue a Decision Notice which will set out any proposed breaches of Relevant Requirements and proposed sanctions. If the breaches and sanction are accepted by the investigation subject, the process will end there. Agreed Decision Notices are subject to approval by an Independent Reviewer. Publication of sanctions issued is mandatory.
- Tribunal: a matter shall be referred to the Tribunal if it is neither concluded at the Investigation stage nor otherwise settled. The Tribunal will hear evidence and determine whether or not to make an Adverse Finding that the investigation subject has breached Relevant Requirements. Where an Adverse Finding has been made, the Tribunal may impose sanctions. Publication of sanctions issued is mandatory.
- Settlement: at any time after a Notice of Investigation has been issued but before a Tribunal has issued its decision, the parties may seek to agree settlement. The Executive Counsel will issue a Settlement Decision Notice if the terms of settlement are agreed. Agreed Settlement Decision Notices are subject to approval by an Independent Reviewer. Proceedings will continue if settlement is not reached.
AEP and supporting documents
| Name | Audit Enforcement Procedure |
|---|---|
| Publication date | 29 June 2023 |
| Type | Operating procedure |
| Format | PDF, 8.7 MB. View HTML version |
| Name | Guidance for the Case Examiner |
| Publication date | 29 June 2023 |
| Type | Guidance |
| Format | PDF, 1.3 MB. View HTML version |
| Name | Guidance on the opening of investigations (AEP) |
| Publication date | 4 January 2022 |
| Type | Guidance |
| Format | PDF, 1.2 MB. View HTML version |
| Name | Guidance on disclosure of Unused Material |
| Publication date | 4 January 2022 |
| Type | Guidance |
| Format | PDF, 93.3 KB. View HTML version |
| Name | Hearing Guidance |
| Publication date | 29 June 2023 |
| Type | Guidance |
| Format | PDF, 1.5 MB. View HTML version |
| Name | Sanctions Policy (AEP) |
| Publication date | 4 January 2022 |
| Type | Policy |
| Format | PDF, 1.3 MB. View HTML version |
| Name | Publication Policy (AEP) |
| Publication date | 26 April 2022 |
| Type | Policy |
| Format | PDF, 2.1 MB. View HTML version |
| Name | Reaching determinations in respect of Proposed Settlement Agreements under the Accountancy Scheme, Actuarial Scheme and Audit Enforcement Procedure |
| Publication date | 4 January 2022 |
| Type | Policy |
| Format | PDF, 1.2 MB. View HTML version |
| Name | Board Guidance on Retention and Delegation of Investigation Decisions |
| Publication date | 4 January 2022 |
| Type | Guidance |
| Format | PDF, 1.3 MB. View HTML version |
| Name | Convening Tribunals and Appeal Tribunals |
| Publication date | 23 September 2022 |
| Format | PDF, 1.5 MB. View HTML version |
| Name | Tribunal Panel Member Statement of Independence Guidance Notes |
| Publication date | 23 September 2022 |
| Type | Guidance |
| Format | PDF, 1.5 MB. View HTML version |
| Name | Tribunal Panel Members Fees and Expenses Policy |
| Publication date | 1 April 2024 |
| Type | Policy |
| Format | PDF, 126.7 KB. View HTML version |
| Name | Tribunal and Appeal Panel Terms of Appointment |
| Publication date | 31 October 2025 |
| Format | PDF, 262.6 KB. View HTML version |