Together with the Association of Financial Mutuals, the Building Societies Association and UK Finance, we are asking the Government to ensure that all regulation including the proposals for companies, directors and auditors is proportionate and supports growth.
The Association of Financial Mutuals (AFM), the Building Societies Association (BSA), the Quoted Companies Alliance (QCA), and UK Finance have today jointly published “Audit for Growth: Proportionality in Audit and Reporting“, a new policy paper outlining proposals to modernise the UK’s audit regime.
The four trade bodies collectively represent over 1,500 firms across financial services and capital markets. They say smarter audit regulation is essential to unlock competition, choice, investment and growth — while continuing to uphold trust in financial reporting.
The current rules treat all Solvency UK, banks, building societies, and Main Market listed firms, as well as some financial mutuals, as Public Interest Entities (PIEs), regardless of size or complexity. This blanket approach results in disproportionately high audit costs and limited choice of providers for most PIEs, with significantly increased regulatory pressure for smaller and mid-sized audit firms.
The joint policy paper sets out a call for a simpler, size-based threshold for Public Interest Entity (PIE) status to capture truly large and systemically important entities alongside a more proportionate framework for audit and reporting. It outlines six key recommendations, including retiring the Other Entities of Public Interest (OEPI) regime, abandoning proposals for managed shared audits for FTSE 350 firms, streamlining reporting requirements, and rethinking earlier proposals for directors’ accountability.
