The Financial Reporting Council (FRC) has set the budget for 2026-27 at £73.3m, reflecting a below inflation increase of 1.36% while headcount will once again remain flat at 480 staff.

Despite the government’s decision to abandon the Audit Reform Bill and not to go ahead with the creation of a new audit regulatory oversight body with statutory powers, the FRC stressed its ‘purpose, strategic objectives and plans remain unchanged’.

The decision to virtually freeze the budget for the next financial year comes as the FRC overhauls the audit supervision system with the introduction of a ‘major evolution of its audit supervisory model’.

This will involve the rollout of a ‘more proportionate, effective and integrated framework designed to enhance audit quality’, the FRC said, with ‘more emphasis on firms’ Systems of Quality Management (SoQM), placing this at the heart of supervision activity’.

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