Arab Press

بالشعب و للشعب
Monday, Apr 06, 2026

U.K. Regulator Tells Auditors to Be Tougher on ‘Going Concern’ Assessment

U.K. Regulator Tells Auditors to Be Tougher on ‘Going Concern’ Assessment

The U.K. Financial Reporting Council tightened a key accounting standard used to assess a company’s health following a string of corporate collapses in Britain.
The U.K. Financial Reporting Council on Monday tightened a key accounting standard used to assess a company’s health following a string of corporate collapses in Britain. The accounting and audit sector regulator issued a revised version of ISA U.K. 570, the standard that governs the definition of a business as a “going concern” that is likely going to continue operating for at least another year. Businesses are generally considered going concerns unless management intends to liquidate them or cease operations, or the entity doesn’t have a realistic alternative but to do so. Under the new standard, auditors will be required to more robustly challenge management’s going concern assessment, test the supporting evidence and evaluate the risk of management bias, the FRC said. Auditors will have to consider all of the evidence obtained when drawing their conclusions on going concern, even if part of the evidence is contradictory. Auditors of firms considered public-interest entities, such as credit and insurance companies, and publicly listed and large private companies are required to provide a clear conclusion on whether management’s assessment of going concern is appropriate, the FRC said. “Our own enforcement work has demonstrated a need to strengthen existing going concern standards, which is a fundamental aspect of audit, so that investors can have confidence in audited financial statements and businesses’ financial prospects,” FRC Chief Executive Stephen Haddrill said. The standard change, which will be effective for reporting periods starting on or after Dec. 15, sets out tougher requirements for auditors than current international standards, the FRC said. It comes amid increasing scrutiny from regulators and lawmakers over the country’s accounting and audit sector, in particular the quality of the work provided by the Big Four firms Deloitte & Touche LLP, Ernst & Young LLP, KPMG LLP and PricewaterhouseCoopers LLP. “This is in response to findings from our enforcement and audit investigation work, including learning the lessons of BHS,” a spokesman for the FRC said. BHS Ltd. was a British apparel and furniture retailer that collapsed in the spring of 2016. Other British companies followed suit, among them construction firm Carillion PLC and coffee chain operator Patisserie Holdings PLC. Lawmakers and regulators are discussing an overhaul of the rules governing the U.K. accounting and audit sector. The Competition and Markets Authority has suggested an operational split between companies’ audit and nonaudit businesses, while a parliamentary committee called for a structural separation. The FRC during the year ended March 31 increased the number of investigations against the country’s audit firms, and handed out more and higher fines than in previous years. As part of the changes in the sector, the FRC will become part of a new regulatory body called the Audit, Reporting and Governance Authority.
Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Iranian Drone Strike on US Embassy in Saudi Arabia Reportedly Targeted Intelligence Facility
Saudi Deputy Foreign Minister Meets French Embassy Official to Strengthen Bilateral Engagement
Saudi Arabia Calls on United States to Seize Strategic Opportunity to Reshape Middle East
Dating Apps Surge in Saudi Arabia as Social Norms Rapidly Evolve Among Youth
Saudi Arabia Detains Over Fourteen Thousand Illegal Residents in Week-Long Enforcement Drive
Saudi Foreign Minister Engages in Diplomatic Talks with Pakistan, Kuwait and Latvia on Regional Developments
Saudi Arabia Intercepts Cruise Missile as Regional Tensions Intensify
Saudi Stock Market Edges Higher as Tadawul Index Records Modest Gain
Underlying Rivalry Between Saudi Arabia and UAE Persists Despite Temporary Calm
Saudi Arabia’s Non-Oil Sector Contracts in March as Regional Tensions Weigh on Business Activity
Saudi Arabia Unveils Ambition to Establish Prestigious Global Prize Rivaling the Nobel
Saudi Crown Prince to Engage Wall Street in Push for Investment and Economic Expansion
Iran Accuses Saudi Arabia and UAE After Downing of Chinese-Made Drone
Saudi Arabia Condemns Attack on Hospital in Sudan, Calls for Protection of Civilians
Coordinated Drone Strike Targets CIA Facility Within US Embassy in Saudi Arabia
Italy’s Meloni Prioritises Energy Security and Strait of Hormuz Stability During Gulf Tour
Uncertainty Emerges Over Timeline and Direction of Saudi Arabia’s Ambitious Ski Resort Project
UAE and Saudi Arabia Escalate Strategy with Drone Operations Targeting Iran
Trump Delivers Characteristic Remarks on Saudi Crown Prince Amid Intensifying Iran Conflict
Drone Strike on US Embassy in Riyadh Caused Greater Damage Than First Reported
Saudi Arabia Introduces Flexible Solutions for Expired Visas Amid Regional Disruptions
Saudi Arabia’s Online Car Market Accelerates with AI Pricing and Fully Digital Buying Experience
Saudi Arabia Reassesses Defence Strategy as Iranian Drone Threat Drives Shift in Military Partnerships
Drone Strikes Target Saudi Arabia, Kuwait and Bahrain as Regional Conflict Intensifies
Japan and Saudi Arabia Align Efforts to Ease Rising Tensions with Iran
Saudi Crown Prince and Italy’s Meloni Strengthen Strategic Ties in High-Level Talks
SpaceX Explores Potential Five Billion Dollar Investment from Saudi Sovereign Wealth Fund Ahead of IPO
Saudi Arabia Lifts Key Import Barriers to Expand Access for U.S. Beef Exports
Saudi Arabia Enforces Strict Travel Penalties for Visits to Restricted Countries
Italy’s Meloni Embarks on Strategic Gulf Tour to Address Energy Security and Regional Stability
Saudi Film Festival Rescheduled to Summer as Regional Tensions Continue
Saudi Arabia Reports Forty Two Point Six Billion Dollars in Foreign Tourist Spending in 2025
Saudi Crown Prince and Russian President Hold Strategic Call on Escalating Regional Crisis
Saudi Arabia Advances Rail Network as Strategic Alternative to Strait of Hormuz Shipping Route
Ruanyun Edai Launches Saudi Arabia Hub With Forecast of Ten Percent Revenue Growth
Greek Defence Minister Visits Troops in Saudi Arabia Following Successful Missile Interception
Saudi Arabia Expands Global Strategy With Focus on African Critical Minerals
SpaceX Explores Potential Five Billion Dollar Investment From Saudi Fund Ahead of Possible IPO
US Central Command Dismisses Iranian Claim of Mass Casualties Among American Personnel in Saudi Arabia
Co-Diagnostics to Establish Molecular Diagnostics Facility in Saudi Arabia Through Joint Venture
Trump Engages Saudi Crown Prince in Talks on Potential Iran Ceasefire
Saudi Arabia’s Sadara Suspends Operations as Supply Chain Disruptions Intensify
Saudi Arabia Accelerates Energy Shift by Trading Oil Revenues for Battery Investments
Saudi Arabia Introduces Flexible Options for Expired Visas Amid Regional Disruptions
Online Narratives Surge as Iran–US Tensions Spill Into Digital Arena Following Trump Remarks
Saudi Arabia Urges Trump to Seize Strategic Moment as UAE Weighs Ground Deployment
Saudi Arabia Redirects Nearly One Million Barrels of Oil Daily Away from Strait of Hormuz
Saudi Arabia Carries Out Execution of Businessman Linked to 2011 Qatif Unrest
Ukraine–Saudi Defense Pact Signals Rising Demand for Battlefield Expertise
Saudi Arabia Balances Diplomacy and Defense Preparedness Amid Iran Conflict
×