FRC programme to enhance capabilities of small UK audit firms

Core Viewpoint - The Financial Reporting Council (FRC) has launched a new initiative, the Scalebox Programme, aimed at enhancing the capabilities and quality management of smaller audit firms in the UK Public Interest Entity (PIE) audit sector [1][2]. Group 1: Initiative Overview - The Scalebox Programme invites eligible smaller firms to collaborate with the FRC to improve their audit quality and management systems [2]. - The initiative will help the FRC determine proportional oversight measures for less complex PIE entities [2]. - Participating firms may benefit from reduced formal inspection, supervision, and registration requirements during the fiscal years 2025/26 and 2026/27 if they demonstrate commitment and progress [2][6]. Group 2: Support for Smaller Firms - The programme recognizes the resource and capacity constraints faced by smaller firms in the PIE market [3]. - Each participating firm will receive a tailored work programme from the FRC, ensuring that audit quality remains a priority [3]. - Firms must engage in activities aligned with the international auditing standard ISQM (UK) 1 to remain in the programme [3]. Group 3: FRC's Commitment - FRC CEO Richard Moriarty emphasized the importance of supporting firms that aim to grow in the PIE audit market while maintaining high-quality standards [4]. - The FRC aims to provide a more lenient regulatory oversight for firms in the programme, focusing resources on supporting their improvement [6]. - Accountability for progress will rest with the audit firms, with a requirement for demonstrable improvement over time to remain in the programme [6]. Group 4: Investigations into Larger Firms - In July 2025, the FRC initiated an investigation into Deloitte regarding its audits of Glencore for the financial years ended 31 December 2013 to 31 December 2020 [7].