Council approves new requirements for audit firms

Council has approved changes to the Audit Regulations which will be effective from 1 June 2025. While the changes will not impact many ICAS firms, it's important to review and understand the two new requirements which have been introduced.

Firstly, sole practitioner auditors will require to have an alternate in place from 1 December 2025 onwards. This should be someone who could assist with the transfer of clients to a new audit firm in the event of the practitioner’s incapacity or death, easing the burden on the sole practitioner’s family and colleagues. 

As ICAS introduced the same requirement for all sole practitioners with practising certificates in 2023, all sole practitioners who are auditors should already have suitable arrangements in place.

Secondly, there is a new requirement for audit firms to inform ICAS where audits of a certain size or complexity are taken on. Full details of the requirement can be found in Regulation 3.15A, and include:

• Listed entities.
• Non-listed entities with a turnover in excess of £750 million.
• Public interest entities (as defined by the FRC). 
• Audit fees which will be twice the firm’s existing highest audit fee (subject to a de minimis of £25,000). 

Firms which expect to make frequent notifications to ICAS can apply for a waiver, reducing the administrative burden for firms and ICAS. The requirement does not cover PIEs which firms must otherwise report to the FRC. 

Please contact ICAS’ Regulatory Authorisations Team if you would like more information.

Read the updated Audit Regulations