Newswire April 2025

AUDIT & ACCOUNTING

Statutory auditors have previously not been allowed to carry out certain ‘non-audit services’ for a public interest entity they audit (for example, tax advice) as these threaten auditor independence. However, an additional effect of this is to prevent such audit firms from bidding to become that entity’s auditor, even if they intend to cease provision of non-audit services in the event of a successful tender, thereby impacting competition and choice of providers in the PIE market. 

A new statutory instrument aims to address this by allowing the FRC discretion to permit an audit firm to tender for PIE engagements where they are currently a non-audit service provider.

IAASB strengthens auditor responsibilities for going concern through revised standard

The International Auditing and Assurance Standards Board (IAASB) has released its . The revised standard aims to address questions raised regarding auditor responsibility by significantly enhancing the work of auditors in international markets in evaluating management’s assessment of the ability of the entity to continue as a going concern.

Many of the adjustments in the IAASB’s revised standard are in line with similar ‘UK pluses’ in the UK revised standard, which is already effective in the national audit market and, therefore, this is expected to have minimal impact on UK audit engagements, though will strengthen confidence for UK investors and auditors alike in international capital markets.

Further information can be found in the IAASB’s press release.

FRC releases updates to reflect company size threshold amendments

Following UK legislative changes to company size thresholds effective 6 April 2025, the FRC has also taken the opportunity to release corresponding updates to relevant publications. Further information can be found via the regulator’s website – a useful summary sheet has also been provided.

FRC updates position on Capital Restructuring at UK Audit Firms

The FRC has reiterated its position on capital restructuring at UK audit firms. The regulator has stated that they are not opposed, in principle, to capital restructuring within the market, arguing that ultimately ownership structures remain a matter for the firms themselves. They acknowledge the opportunities for the enhancement of audit quality driven by additional investment in innovation and technology, as well as the potential for growth and increased choice in the sector. The FRC advises that firms considering taking this path engage early with the regulator. It also extends an invitation to discuss directly with potential investors or other interested parties considering entering the market. Further information can be found here.

FRC publishes first in a series of materials to help SMEs better understand audit requirements

As part of its ongoing campaign to support SMEs, the regulator has published the first of a series of materials aimed at helping entities within the sector understand and effectively manage the annual audit process.

The document provides a summary of auditing standards, giving context on the role that the ISAs play in increasing confidence in capital markets through ensuring consistent, accurate and fair financial reporting.

UKEB issues final comment letter and feedback statement on IASB targeted improvements on provisions

On 12 November 2024 the International Accounting Standards Board (IASB) published the Exposure Draft IASB/ED/2024/8 Provisions - Targeted Improvements proposing amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The UKEB’s response to the IASB was submitted on 12th March 2025. All stakeholder feedback received was considered when finalising the Comment Letter. An accompanying Feedback Statement describes how feedback received from stakeholders was addressed. More information can be found on the UKEB’s website.

AUDIT & ACCOUNTANCY – PENSIONS

PRAG publishes discussion paper on the accounting implications of the Virgin Media Case for Pension Scheme Accounts

Against a background of sustained industry and media interest and discussion around the Court of Appeal’s decision on Virgin Media Ltd vs NTL Pension Trustees II Ltd in 2024, the Pensions Research Accountants Group (PRAG) Executive has issued a useful discussion paper outlining their understanding of the accounting implications for Pension Scheme accounts, with a particular focus on Contingent Liability disclosures under FRS 102 and the Pensions SORP (2018).

Whilst the PRAG’s paper only covers the impact on the accounts of the schemes themselves, further discussion and analysis of the effects on the wider sector can be found in Mercia’s latest blog on the subject.

AUDIT & ACCOUNTANCY - ACADEMIES

2025 Academies Accounts Direction and information on submitting audited financial statements released

The Department for Education (DfE) has released the 2025 edition of the Academies Accounts Direction, the document used by finance professionals at Academy Trusts and their auditors to help interpret and apply relevant accounting frameworks in an academy setting. The DfE has also provided updates to its ‘Coketown’ model accounts and the auditor specific framework and guidance. Further information and the documents themselves can be found here.

AUDIT & ACCOUNTING – CHARITIES

Charities SORP public consultation launches

The Charities SORP Committee has launched a public consultation on its Exposure Draft SORP, seeking stakeholder views on the major areas of change (in particular the revisions to FRS 102 itself around accounting for leases and the introduction of a five-step revenue recognition model) which will inform the final revised SORP. The public consultation runs until 20 June 2025.

Consultation on financial thresholds in charity law

Following recommendations from the Law Commission around introducing a periodic governmental review of the audit and independent thresholds under the Charities Act (2011), with a view to potentially moving to an inflation linked increase model, the Department of Culture, Media and Sport (DCMS) has opened a public consultation, requesting views from the public and other stakeholders on the matter. This issue will be of particular interest to both financial practitioners in the sector – for whom increased audit thresholds in particular may represent an opportunity to reduce admin burden and costs – and charities and the public themselves, for whom the assurance provided by audits and independent examinations may help to drive donations and grant income. The consultation runs until 12 June 2025. ICAEW

ACCA

ACCA issues latest Quarterly Audit Monitoring Report (April)

The ACCA's latest Quarterly Monitoring Report provides useful context and information on technical breaches of the institute's eligibility criteria for auditors. The report also touches on private equity investment in audit firms, discussing key considerations for practitioners, such as the focus on quality.

CORPORATE GOVERNANCE

DSIT releases Cyber Governance Code of Practice

The Department for Science, Innovation and Technology (DSIT) has released a Cyber Governance Code, which aims to assist company boards and directors build resilience to a wide range of cyber risks across their organisation. The Code, which has been co-designed with technical experts from the National Cyber Security Centre (NCSC) and a range of governance experts across industry, focuses on the actions senior leaders should take to govern cyber risks effectively within their organisation. 

The Code forms part of the government’s free package of support on cyber governance and should be the first point of reference for board members. It is underpinned by Cyber Governance Training, which helps boards and directors to strengthen their understanding of how to govern cyber security risks, and the Cyber Security Toolkit for Boards, which supports boards and directors in implementing the actions set out in the Code.

There are also documents showing how the Code maps to cyber standards, such as the NCSC’s Cyber Assessment Framework (CAF), and a concise, one page summary of the Code.

SUSTAINABILITY

EU Parliament confirms delays to Sustainability Directives

Following the presentation of its Omnibus package of measures in February, the EU Parliament has voted to postpone the implementation of its Corporate Sustainability Reporting and Due Dilligence Directives (CSRD and CSDD). These directives effect large companies which have not yet begun to report on a voluntary basis and listed SMEs. Following the vote, which was overwhelmingly backed by MEPs, large entities will report on their FY 2027 in the 2028 calendar year, with listed SMEs beginning one year on. It is hoped that the decision will boost competitiveness by simplifying reporting requirements and reducing the administrative burden.   

TNFD launches free learning resource on nature-related financial disclosures

The Taskforce on Nature-related Financial Disclosures (TNFD) has launched The Learning Lab, a suite of learning tools which can be accessed by finance professionals or other interested parties free of charge. The offering is aimed at increasing awareness of TNFD and contributing to the upskilling of finance teams and others in this area. The courses are aimed at professionals at all stages of their career and include a special course for those outside of accountancy looking to understand TNFD’s work and recommendations. This resource can be accessed via the Learning Lab website.

TAXATION