Sandbox: Audit Tech and AI
2 minute read
Overview
Technology, including AI, is changing the audit market and has significant potential to improve audit quality among a wide range of firms. The FRC supports innovation and the responsible and appropriate use of technology to promote high audit quality, and competition and growth in our regulated sectors.
The Audit Tech and AI Sandbox aims to support audit firms looking to adopt AI, software, new products and features, or other technology to improve quality and drive better outcomes. We welcome applications from firms across the market who are looking to innovate or adopt new technology, have considered the key regulatory issues, and would benefit from collaborating with the FRC on how audit standards and guidance on technology can be applied in practice.
In this first iteration of our sandbox, we welcome interest from applicants committed to innovation for audit quality, from – for example – large firms experimenting with agentic and generative AI, mid-tier firms looking to trial or scale up advanced tools, and smaller firms taking earlier steps, perhaps working with a third-party technology provider.
Participating in the sandbox
Sandbox participants will have access to FRC expert teams through a series of dedicated engagement meetings (estimated three) over a period of three to four months; associated information sharing and review; and collaborative critical evaluation against regulatory frameworks. The sandbox will not involve detailed technical review of any proposed technology, but support considering the regulatory challenges and opportunities.
Participants could benefit from:
- Support applying auditing standards and FRC guidance, including ISQM 1 and engagement standards, the FRC's AI in Audit Guidance, Generative and Agentic AI Guidance, and published good practices for the certification of automated tools and techniques.
- Support considering the quality management risks and implications of adopting new technology, whether new products or new features, and whether proprietary or provided by a third party
- Open discussions and collaborative engagement on the wider challenges firms are facing in adopting new technology
Participation in the sandbox will not result in any approval, endorsement or compliance guarantees in relation to a firm's chosen technology or wider practices. Rather, the purpose of the sandbox is to collaborate on the challenge of adopting new technology to improve audit quality.
Eligibility
To be eligible for the sandbox, applicants should:
- Be a registered audit firm in the UK.
- Have identified a technology or application of AI which could improve the quality of the firm's audit work, and may be innovative for the firm or in the market.
- Have taken steps to consider how the technology can be integrated into the practice or audit methodology, the key compliance issues, the relevant auditing standards and any key problems or challenges identified.
- Have progressed to a point where their proposed use of technology is ready for critical evaluation against regulatory frameworks, ready for testing or piloting, or in limited deployment.
- Be prepared to commit time from appropriate staff to the sandbox engagement.
We welcome applications from audit practices of any size or specialism.
If appropriate, a third-party technology or service provider may be involved later in the sandbox engagement.
Successful applicants will be required to agree to the sandbox terms of engagement.
Application process
To apply, firms need to complete the application form, which requires details of:
- Firm registration details, number of audit partners and number of audit engagements in the last financial year.
- The proposed/chosen technology and its application in audit engagements (or other audit business activity).
- The envisaged benefits of using the technology, including anticipated audit quality improvements.
- The steps taken so far to develop and/or implement the technology and associated policies or methodologies.
- The steps taken so far to consider auditing standards, and the key issues, challenges or issues identified.
- Project sponsor and key staff involved in the project with appropriate expertise and seniority.
The deadline for applications is 5pm on Friday 17 July 2026.
Any queries: please contact [email protected]
We will consider applications against our assessment criteria, with emphasis on improving audit quality, innovation and potential benefits for the market and public interest. We intend to recruit a diverse range of participants representing different parts of the audit market and different technologies. We aim to determine successful participants within three weeks.
Application form