FRC Launches Consultation on Enhanced Enforcement Procedures as part of its end to end enforcement review
News types: Consultation Announcement
Published: 1 October 2025
The Financial Reporting Council (FRC) today launched a public consultation on proposed updates to its Audit Enforcement Procedure (AEP), as part of a comprehensive end-to-end review of its enforcement processes. The consultation runs until 9 January 2026 and seeks views from across its stakeholder community on changes designed to provide more targeted and timely regulatory responses.
The proposals introduce three new routes to resolution alongside existing options, expanding the FRC's toolkit from two to five possible pathways when addressing potential breaches of auditing and ethical standards. The new routes include Published Constructive Engagement, an Accelerated Procedure, and an Early Admissions Process, all designed to deliver more proportionate outcomes while maintaining the robustness of the current regime.
Under the current system, the FRC can only choose between a private Constructive Engagement process with audit firms or launching a full investigation. The proposed changes aim to provide a more graduated approach that may better reflect the FRC’s response to the specific circumstances of each case.
This consultation follows alongside the FRC's formal engagement on its Future of Audit Supervision Strategy (FASS), launched in August 2025, which aims to evolve the FRC’s supervisory model to continue to support a resilient audit market for the future. Together, these key strategic initiatives demonstrate the FRC's commitment to continuously improve its regulatory approach and create a cohesive framework that encourages firm accountability and drives system-wide improvements across the market.
Key proposals include making public certain regulatory interventions through Published Constructive Engagement, allowing others in the profession to learn from issues identified. The proposed Accelerated Procedure would enable faster resolution of cases where there is clear evidence or admission of failings, while the Early Admissions Process would allow firms to conduct their own reviews under FRC oversight and admit identified breaches in certain circumstances.
Richard Moriarty, FRC CEO"The FRC’s revision of its end to end enforcement processes has looked at our enforcement procedures from end to end to make sure that they remain efficient, effective and proportionate, but also that they continue to maintain the trust and confidence as we serve the public interest.
"We’re proposing a graduated set of interventions that would expand the range of tools we have to take more proportionate and timely action while maintaining our ability to conduct thorough investigations where needed."
The FRC's enforcement activity plays a crucial role in upholding the integrity, quality and independence of statutory audits in the UK, protecting the public interest by ensuring auditors comply with relevant laws, regulations and professional standards. Financial sanctions deter misconduct and uphold professional standards, while transparent publication of outcomes informs the public of breaches and regulatory actions, maintaining confidence in well-functioning UK capital markets
The FRC will carefully consider all submissions before finalising its policy approach and plans to issue supporting documentation to aid implementation of the revised proposals.
The final changes would then take effect from 1 July 2026, subject to the outcome of the consultation.
The consultation document and supporting materials are available on the FRC website, with responses requested by 23:59 on Friday 9 January 2026. The FRC is particularly keen to hear from audit committees, investors, audit firms, professional bodies and users of audited financial statements.
Richard Moriarty, CEO, joined Kate O’Neill, Director of Stakeholder Engagement and Corporate Affairs to discuss the aims of the consultation for the latest ‘In Conversation’ podcast episode. Listen to the podcast episode.
Registrations are open for the FRC’s webinar on Wednesday 8 October focusing on the consultation’s proposals. Attendees will hear from Kate O’Neill, Elizabeth Barrett, Executive Director of Enforcement, and Anthony Barrett, Director of Audit Quality Review.