UK’s Financial Reporting Council (FRC) has published its Strategy for 2025-28 alongside its Annual Business Plan and Budget for 2025-26, following consultations with stakeholders.
This marks the first three-year strategy to be introduced by the regulator since 2023.
The refreshed strategy focuses on enhancing businesses’ access to capital by ensuring a regulatory environment that maintains “trust and confidence” in key areas such as audit, corporate reporting, and corporate governance.
“These are all critical factors for investors and other stakeholders who rely on them to thrive and grow, such as pension holders, suppliers and employees,” the regulator said in its press statement.
One of the central themes of the strategy is improving the FRC’s inspection and supervision of audit firms, as well as refining its approach to enforcement.
The strategy also highlights several key projects, including a review of how the FRC conducts its inspections and supervision of audit firms.
This includes evaluating its enforcement approach and holding auditors accountable when failings are identified.
In addition, the FRC’s Scalebox initiative, designed to support smaller firms in building capabilities, will expand to collaborate with audit firms and other entities to foster innovative approaches that drive growth and investment.
The regulator has also committed to focusing on the audit market for small and medium-sized enterprises (SMEs), ensuring it serves their needs effectively.
The strategy builds on the FRC’s recent review of the UK Corporate Governance Code, which simplified guidance and unnecessary requirements, giving greater flexibility to Boards to comply or explain with the provisions of the Code.
FRC chief executive Richard Moriarty said: “If the FRC as a regulator is to encourage economic growth and investment, I believe it is important we support responsible risk-taking, not seek to eliminate it.
“Our strategy puts this principle at its heart whilst ensuring we continue to encourage high standards in corporate governance, reporting and audit, which are vital foundations for businesses in accessing capital and broader stakeholder support to thrive.”
The new strategy also comes as the FRC prepares for upcoming draft legislation to modernise its statutory powers, ensuring they remain “fit” for purpose beyond 2028.
The FRC added that it will also work closely with the Department for Business and Trade to align with the government’s action plan for regulation, which aims to strengthen accountability through formal performance reviews.