Small and medium-sized enterprises (SMEs)
Published: 4 February 2025
1 minute read
Overview
The FRC has launched a year-long campaign to help small and medium-sized enterprises (SMEs) access audit services and reduce reporting burdens where possible. The initiative in turn aims to improve their access to capital and to support their growth ambitions.
The campaign will examine how SMEs undertake financial reporting, use and access audit to access capital, and how the FRC can help audit firms apply audit standards proportionately to these smaller, lower risk and less complex companies.
The FRC will undertake extensive and open engagement with our stakeholders as part of this campaign, including:
- SMEs and their representatives
- capital providers to SMEs
- auditors who provide services to SMEs
- professional bodies.
You can find out more about the campaign in the FRC’s announcement.
Podcast
Kate O’Neill, Director of Stakeholder Engagement and Corporate Affairs, was joined by Richard Moriarty, CEO, Mark Babington, Executive Director of Regulatory Standards, and Miranda Craig, Director of Strategy and Change, on an episode of the FRC’s In Conversation podcast to discuss the launch of the campaign.
Market Study
The FRC has launched a market study examining how effectively the audit market serves SMEs and exploring opportunities to reduce their reporting burden where possible.
This exploratory market study focuses on the challenges faced by SMEs in relation to audit and reporting, where practitioners have difficulties in auditing SMEs, and understanding the decision-making process for SMEs who procure audit services when otherwise exempt.
Guidance to support the proportionate audit of SMEs
In spring 2025, the FRC will publish for consultation a Practice Note to support auditors of SMEs. Practice Notes are a form of guidance which help auditors identify opportunities to proportionately apply auditing standards.
The FRC plans to publish its final Practice Note before the end of 2025.
Support material for SMEs
Across 2025, the FRC will publish material to support owners and managers of SMEs to be able to better understand auditing requirements, and how they are applied to their particular businesses and provide some helpful tools for SMEs to engage in the audit tendering and process itself more confidently and knowledgeably.