The Financial Reporting Council (FRC) is re-consulting on its proposals to revise two auditing standards to ensure auditors can take a proportionate approach to a key area of their engagements with entities.

The original proposals came in for criticism with respondents to the first consultation stating ‘the original objective could require auditors to comprehensively review every law and regulation applicable to an entity, expanding the audit scope’.

Another objection was that the FRC’s standards ‘would have required auditors to consider reporting even where no legal or ethical obligation existed – was disproportionate to the risk it addressed’.

The second consultation proposals water down the initial suggestions, set out in earlier consultations in 2023, and arguably reflect the drive for less regulation which all regulators have been told to pursue by the government as a matter of priority.