The Financial Reporting Council (FRC)
today announced the launch of its Innovation and Improvement Hub,
reinforcing its commitment to create an exploratory space for
collaborative problem-solving with market participants whilst
supporting high standards and economic growth.
The Hub builds on the success of
existing initiatives such as the Audit Sandbox and Scalebox
programmes, bringing together cross-FRC approaches under one
unified framework. It aims to provide stakeholders with increased
choice of routes into regulatory support, moving beyond
traditional supervisory relationships to foster collaborative
conversations on common interests.
The FRC has identified three early
priorities for the Hub's work; exploring how artificial
intelligence might affect the future of audit, working
collaboratively with companies to reduce the length of annual
reports and accounts, which have grown significantly in recent
years, and deepening cross-regulatory work to ensure there
is a joined up approach from the whole
ecosystem.
Another initiative launched last week
centres around the Scalebox offering dedicated resources to
smaller audit firms to help build their capabilities around
quality management systems whilst enabling the FRC to learn about
proportionate oversight for smaller audit firms in the PIE
market.
Richard Moriarty, FRC CEO,
said:
"There is an important role for
regulators to encourage improvement and enable innovation. The
Innovation and Improvement Hub demonstrates our commitment to
provide a space for industry participants to experiment and
discuss issues, so we can drive innovation and support growth
across the sector whilst maintaining our focus on quality and
market resilience."
The Hub's broader innovation agenda
complements the FRC's recent work to reduce reporting
requirements, including the updated UK Stewardship Code 2026
which introduced fewer principles for asset managers and more
flexible reporting structures, alongside ongoing efforts to help
auditors deliver more proportionate audits for small and
medium-sized enterprises.
