The Financial Reporting Council (FRC) said the modernised audit enforcement procedure will ‘align supervisory, investigatory and enforcement activity more closely to identify risks earlier, act more quickly, and support continuous improvement across the market’.

The new rules will come into effect from 1 July 2026.

The overhaul of audit enforcement will see the regulator take a ‘robust response to serious or significant failures’, speeding up interventions to avoid the lengthy delays currently experienced. This should also help audit firms facing an investigation, which can currently take years for the FRC to resolve.

A string of audit failures over the years have resulted in the need to totally modernise the enforcement process. This does not mean the end of investigation activity, but a more nuanced approach to their use.