SME audit reform
The Financial Reporting Council (FRC) has announced a package of measures to make audits more proportionate and efficient for small and medium-sized enterprises (SMEs), ‘helping to support their growth and access to capital’. It has said it will, among other actions, publish new guidance to support auditors in applying auditing standards in a way that is relative to the complexity and size of the business; launch a new programme of engagement with auditors of SMEs to support understanding of this new guidance; and establish a working group to promote more consistency in how audits of SMEs are supervised. Find out more.
UK-EU trade agreement
The UK and the EU have created a new Sanitary and Phytosanitary (SPS) Agreement. This, together with the Windsor Framework, will make it easier, cheaper and more predictable for goods to move not just between the UK and the EU, but also from Great Britain to Northern Ireland.
This agreement covers the trade, production and movement of plants, animals and their products; food and feed safety; broader nutrition-related areas such as food supplements, fortified foods, food for specific groups, nutrition and health claims, and nutrition labelling; wider agrifood rules related to food labelling, organics, key agrifood marketing standards and compositional standards; and regulation of pesticides and biocides.
The IPSASB has proposed amendments to IPSAS 22
More information has been published by the UK Department for Environment, Food and Rural Affairs (Defra). This includes whom these changes will apply to and when; the benefits and what these will mean for businesses; what businesses can do now (including signing up for Defra email alerts); and the launch of a ‘call for information’ to understand the impact of the agreement and what further support businesses will need in order to prepare.
UK payment practices
ACCA has welcomed the changes to the UK’s late payment regime. The proposals set out in March by the Minister for Small Business and Economic Transformation promise the most dramatic change to the UK’s payment culture in a generation. When implemented they could help transform the cashflow of the small business sector.
The new regime could ‘clear the way for significant investment among the UK’s all-important small business sector and kick-start much needed growth’, according to ACCA. Glenn Collins, head of technical and strategic engagement, ACCA UK, said: ‘It is good to see a government taking such decisive action on the scourge of companies not paying promptly. Importantly the proposed regulation focuses on large businesses not paying smaller businesses rather than a blanket approach to all. With the overwhelming evidence that late payment is a significant drag on the UK economy, these proposals promise to end the problem of poor payment practices.’
Sustainability
As major jurisdictions increasingly adopt sustainability reporting standards developed by the International Sustainability Standards Board (ISSB), it has released a Jurisdictional Readiness Assessment Guide to help reporters follow resulting laws and regulations. The guide gives practical examples of experiences within 17 jurisdictions that have fully adopted ISSB standards and 16 jurisdictions that are taking steps to adopt these rules. Major markets that have finished this work include Australia, Brazil, Hong Kong SAR and Mexico, with Canada, the Chinese mainland, Singapore, South Korea and Switzerland among those currently adopting ISSB-based reporting systems. This comes as the UK has adopted a final version of its ISSB-based sustainability reporting standards for voluntary use.
The ISSB has also approved changes to three sector-focused Sustainability Accounting Standards Board standards: agricultural products; meat, poultry and dairy; and electric utilities and power generators.
EU Directive 2026/470, which amends the Corporate Sustainability Reporting Directive and the Corporate Sustainability Due Diligence Directive (CSDDD), was published in the EU Official Journal on 26 February 2026. The Department of Enterprise, Tourism and Employment is required to transpose its provisions into Irish law within 12 months. The directive also introduces updates to the CSDDD, with those elements to be transposed by 26 July 2028.
Directive (EU) 2026/470 is part of the EU’s Omnibus I legislative package and revises existing rules on corporate sustainability reporting and due diligence. It narrows mandatory sustainability reporting to companies with over €450m turnover and more than 1,000 employees; raises thresholds for due-diligence obligations; and introduces protections for smaller suppliers in corporate value chains.
Financial reporting standards
Some companies use ‘adapted’ formats for their FRS 102 financial statements, which more closely align to IFRS formats. However, IFRS has changed after the introduction of IFRS 18, and the Financial Reporting Council has issued amendments to FRS 102 to reflect this. Companies that do not choose to adapt their financial statement formats under FRS 102 will not be impacted by these amendments.
The International Accounting Standards Board is consulting on proposed amendments to IAS 28, Investments in Associates and Joint Ventures, clarifying which investments companies can measure when assessing fair value, in particular changing how the rule applies to insurance.
The International Financial Reporting Standards (IFRS) Foundation has released supporting materials for the third edition of the abridged IFRS for SMEs standard, issued in February and effective from 1 January 2027. The release includes educational materials, podcasts and more.
The International Public Sector Accounting Standards Board (IPSASB) has proposed amendments to IPSAS 22, Disclosure of Financial Information About the General Government Sector, regarding linkages between IPSAS standards and the International Monetary Fund’s Government Finance Statistics Manual 2014 (GFSM 2014). The board noted that governments use IPSAS standards to prepare financial statements and GFSM 2014 to compile statistical reports. The proposed guidance will help public sector bodies better integrate accounting and statistical systems, helping IPSAS-based accounting data be used in GFSM 2014 reports.
Auditing
The International Auditing and Assurance Standards Board (IAASB) is reviewing ISA 540 (Revised), Auditing Accounting Estimates and Related Disclosures. The revisions have encouraged auditors to perform appropriate procedures over accounting estimates and related disclosures. The IAASB is checking whether the amended standard has worked or more changes are needed.
The IAASB has published feedback from its technology quality management roundtables
The IAASB has also published feedback from its technology quality management roundtables, exploring how emerging technologies, including AI, are affecting audit and assurance engagements. Participants said IAASB quality management standards helped auditors handle technology-related risks, although additional IAASB practical guidance would be useful.
Practice investment
The International Federation of Accountants (IFAC) has released research analysing the rapid growth of private equity investment in professional accountancy firms and its potential implications for the future of the profession. IFAC has identified more than 1,000 accountancy firms worldwide with private equity investment over the past 10 years, accelerating significantly since 2022, especially in continental Europe, the UK, Ireland and the US. The federation is assessing implications for transaction structures, firm oversight, independence and conflicts of interest, audit quality, consolidation, competition, and the profession’s attractiveness.
