The regulator has signed a memorandum of understanding with the Department of Levelling Up, Housing and Communities (DLUHC) outlining the FRC's role as shadow system leader for the local audit system.

However, it will only take over the role on a shadow basis until the government sets up the new regulator, the Audit, Reporting and Governance Authority (ARGA). There is no date for this to happen with legislation required before any changes can be made and no timetable or draft legislation has been issued.

During the shadow period, the DLUHC will retain responsibility for oversight of local audit.