FRC launches consultation on enhanced auditing standards to strengthen fraud detection and evaluation of going concern

News types: Consultation Announcement

Published: 1 October 2025

The Financial Reporting Council (FRC) has today launched a consultation on proposed revisions to two key auditing standards, dealing with the auditor’s responsibilities relating to fraud and going concern: ISA (UK) 240 (Revised) and ISA (UK) 570 (Revised) Going Concern.

  • ISA (UK) 240 (Revised) The Auditor's Responsibilities Relating to Fraud in an Audit of Financial Statements
  • ISA (UK) 570 (Revised) Going Concern

The FRC is updating these standards to align with recent revisions to equivalent international standards issued by the International Audit and Assurance Standards Board (IAASB). This alignment is central to maintain equivalence between UK and international auditing standards and preserve the UK's position in global financial markets.

The IAASB's revisions to ISA 240 clarify auditors' responsibilities regarding fraud detection, strengthen risk assessment procedures, and enhance transparency in audit reports—particularly for publicly traded entities. Meanwhile, updates to ISA 570 improve how auditors evaluate whether companies can continue operating, following corporate failures that have damaged public confidence in auditing.

These changes respond directly to stakeholder expectations for more rigorous oversight and clearer reporting about company viability and fraud risks.

As the UK standards have been previously updated, current requirements already reflect most of these changes. The FRC anticipates minimal additional work for auditors beyond what may be required by the international standard revisions themselves.

The FRC has retained specific UK requirements and guidance that reflect the distinctive legal and regulatory context here. These provisions are already included in the current versions of both standards, ensuring continuity for UK businesses and auditors.

When finalised, both standards will take effect for audits of financial statements for periods beginning on or after 15 December 2026, providing sufficient time for preparation.

The consultation runs until Friday 16 January 2026.

Read the consultation paper.

Register for the FRC's webinar, taking place on Tuesday 4 November, to hear from FRC experts on the proposed revisions.

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