The latest news for audit professionals: March 2026

Catch up on the latest audit news from ICAS. We share new CPD guidance for audit professionals, how charities can prepare for the financial reporting changes under the Charities SORP 2026, plus our comments on the recent targeted amendments to UK GAAP.

New guidance on minimum CPD hours for audit professionals

A new guidance note explains how many hours Recognised Supervisory Bodies (RSBs) expect auditors to be spending on audit-related CPD.

RSBs use different models for CPD. ICAS operates an output-based model, while other RSBs use input-based or hybrid models that set minimum hours of CPD for various roles or specialisms.

If you’re a member of an RSB, you must meet the CPD requirements of your membership body. You may also be selected as part of an annual sample or other regulatory review to make sure that’s the case.

Over and above this, the RSB that licences your firm for audit may require Responsible Individuals (RIs) and other employees working in audit to follow its CPD requirements too.

Following a review by the Financial Reporting Council (FRC) in 2025, all RSBs agreed that CPD requirements are unlikely to be met by RIs or audit staff who complete less than seven hours of verifiable audit-related CPD, where audit work forms a significant part of their day-to-day work.

Monitoring against this expectation will be considered on a case-by-case basis. Regulators will take a proportionate approach, considering the circumstances of each firm, RI, or audit team member, and any wider quality control framework in place.

How to prepare for the changes to financial reporting obligations under the Charities SORP 2026 

The revised Charities SORP, effective for reporting periods beginning on or after 1 January 2026, introduces significant updates to how charities prepare their annual reports and accounts.  

While the changes aim to enhance transparency and accountability, they also add substantial new reporting requirements - particularly around income recognition, lease accounting, impact reporting, and reserves. The new rules on income recognition and lease accounting could be particularly challenging for clients. 

Christine Scott CA, Head of Charities and Reporting, said: “Charities need to be clear-sighted about the magnitude of the task ahead. The Charities SORP 2026 represents the most significant update in a decade, and while it supports greater accountability, it also increases the level of effort required to comply. Trustees and finance teams should begin preparing now to ensure they are ready for the 2026 reporting cycle.”

Scottish charity audit threshold increase hailed as a “significant and positive step” 

The Scottish charity audit threshold will rise to £1 million of gross income per year for reporting periods beginning on or after 1 January 2026, up from the current threshold of £500,000.  

Alongside the increase in the audit threshold, the regulations also raise the threshold for the preparation of consolidated group accounts from income of £500,000 to £1 million per year. 

How ICAS is reshaping ethics through The Power of One 

James Barbour CA, Director of Policy, featured on a LumiQ episode talking about how ICAS is reshaping ethics through The Power of One initiative. 

James is an expert when it comes to ethical leadership, which makes him an influential voice on this topic. In the episode, James shares how The Power of One initiative emerged from the aftermath of the financial crisis and continues to influence global standards. 

The episode covered: 

• Lessons from the financial crisis and other global corporate failures. 
• The definition and role of moral courage in ethical decision-making. 
• How accountants can apply these ideas in the age of AI and sustainability.

ICAS’ response to the UK government scrapping the UK Audit and Corporate Governance Reform Bill 

Back in January, ICAS responded to the UK government’s announcement that it was scrapping the UK Audit and Corporate Governance Reform Bill. 

Gail Boag, ICAS CEO, said: “This morning’s announcement that the UK Audit and Corporate Governance Reform Bill has been scrapped is deeply frustrating. The whole accountancy sector and even governments themselves have agreed for years on the need for audit and corporate governance reform.” 

The response came after Blair McDougall, the Minister for Small Business and Economic Transformation, wrote to the Chair of the Business and Trade Committee to inform him that the Government will not be consulting on audit reform legislation. The letter set out three key reasons behind the decision:

• The government’s priority to promote economic growth and reduce administrative burdens.
• The need for major reform being considered less pressing than it was.
• The government’s wider legislative programme meaning parliamentary time would be limited.

Mr McDougall confirmed that it remains important to have effective, proportionate regulation of audit and a regulator that has the right legislative set-up to do the job. So the government will still look to put the FRC on a proper statutory footing as soon as parliamentary time allows.

An update on charity financial threshold changes in England and Wales 

Following public consultation, the Department for Culture Media and Sport (DCMS) announced plans to increase the key financial thresholds applying to the preparation and scrutiny of accounts prepared by charities in England and Wales.  

The threshold increases, intended to reduce the regulatory burden on charities while retaining an appropriate level of transparency, have been welcomed by the charity sector and the accountancy profession, including ICAS.  

Read the full ICAS consultation response. 

Key changes: 

• For a parent charity registered with the Charity Commission for England and Wales (CCEW), the threshold for preparing group accounts will increase to gross aggregate income of more than £1.5 million. 
• For a charity registered with the CCEW and complying with the Charities Act 2011, the audit threshold is to rise to either: 
  • Gross annual income of more than £1.5 million. 
  • Gross assets of more than £5 million and gross annual income of more than £500,000. 
• For a parent charity registered with the CCEW and complying with the audit requirements of the Charities Act 2011, the audit threshold for group accounts is to rise to gross aggregate income of more than £1.5 million after consolidation adjustments. 

In addition, a charity will continue to need an audit if: 

• It’s required to by the constitution of the charity, any other enactment, or on the instruction of its trustees. 
• In the case of a charity with a pre-Charities Act 1992 constitution, the constitution contains a requirement for an audit or examination by a professional auditor. 

Firms should be aware that cross-border charities (charities based in England and Wales but registered in Scotland with the Office of the Scottish Charity Regulator) must continue to comply with the Charities Accounts (Scotland) Regulations 2006, including the accounts preparation and scrutiny thresholds.

Financial thresholds under Scottish charity law are lower and will continue to be lower than financial thresholds under English charity law and the Companies Act 2006 (see above).

ICAS motto embedded in the Ethics Equation 

The ICAS motto ‘Quaere Verum’ (Seek the Truth) has stood the test of time. A key part of any ethical dilemma is making sure you have the appropriate facts. This isn’t always easy. However, you should always aim to gather sufficient and relevant information before forming your professional judgement. 

In his recent article about the ICAS motto, James Barbour CA, Director of Policy, highlights the importance of moral courage. His commentary on the IESBA and ICAS Codes of Ethics clearly links to how auditors apply the FRC’s Ethical Standard for Auditors. 

From an audit perspective, it’s very important that users of the accounts can trust and have confidence that the audit opinion is objective. The Ethical Standard supports this by setting out the overarching principles of integrity, objectivity and independence. It also includes supporting ethical provisions that establish a framework of ethical outcomes that auditors need to meet.  

Thankfully, monitoring visits rarely identify non-compliance with the overarching principles of the Ethical Standard. However, when they do, they’re among the most serious matters identified. As a result, they can lead to the most serious regulatory action by the Authorisation Committee.  

Targeted amendments to the UK GAAP 

In February 2026, the FRC published targeted amendments to FRS 102 (The Financial Reporting Standard applicable in the UK and Republic of Ireland) and FRS 105 (The Financial Reporting Standard applicable to the micro-entities regime). 

The changes are narrow in scope and mainly intend to maintain international alignment with IFRS Accounting Standards, specifically between FRS 102 and IFRS 18 (Presentation and Disclosure in Financial Statements). Other amendments are limited, with only a single amendment made to FRS 105.

The amendments published in February 2026 are effective for accounting periods beginning on or after 1 January 2027, with early application permitted. For most FRS 102 reporters, the practical impact of these amendments is expected to be limited.