FRC
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Evidence and documentation Documenting AI-prepared work
The UK's Financial Reporting Council Says Investigation Subjects Must Be Ready to Identify, Explain and Justify Their Use of AI
In its Annual Enforcement Review of July 2026, the Financial Reporting Council says it anticipates extensive scrutiny of the use of AI in financial reporting, audit and actuarial work in the year ahead, and lists "use of AI" among the communication channels in its advice on firms' data retention policies.
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Regulators and standard setters Audit and assurance
The FRC Says Some Audit Firms Are Now Deploying Generative AI to Perform Audit Procedures and Generate Audit Documentation
In its Annual Review of Audit Quality 2026, dated July 2026, the UK's Financial Reporting Council says some firms are deploying generative AI tools to perform audit procedures and generate audit documentation, plans a thematic review of how the largest firms govern its use, and says limited use of GenAI on audits was observed in the past year.
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Ownership and vendors Who may own a firm
The FRC Says It Is Not in Principle Against Greater Participation of External Private Capital in the UK Audit Market
In a letter dated September 26, 2024, the UK's audit regulator said that ownership structures are "a matter for the firms" and that it is "not in principle against a greater participation of external private capital in the UK audit market." The same letter says there are "important risks that will need to be carefully managed."
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Regulators and standard setters Audit and assurance
Risks, Mitigations and Illustrative Examples: The FRC's Guidance on Generative and Agentic AI, March 2026
Guidance dated March 2026 from the UK's Financial Reporting Council takes up generative and agentic AI in audit. It is aimed at "the central technical teams within audit firms who are responsible for the development of generative and/or agentic AI tools and supporting methodology."
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Evidence and documentation Testing the data and the tools
Functions as Intended: The FRC's Review of How Audit Firms Certify Their Automated Tools, June 2025
In June 2025 the UK's audit regulator published its review of how the six largest audit firms certify the automated tools their auditors use, a snapshot of the firms' processes as they described them in 2024. It found no formal monitoring by the firms "to quantify the audit quality impact of using ATTs," though their use "may sometimes be captured in other activities such as root cause analysis."
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Evidence and documentation Documenting AI-prepared work
What Should Be Found on the File: The UK Audit Regulator's Guidance on Documenting AI Tools, June 2025
In June 2025, the UK's Financial Reporting Council published an illustrative example and guidance on documenting tools that use AI in audits. The guidance "sets out expectations on what should be found on the file, and what can reasonably be documented centrally."
