Campaign to Support UK SMEs Launched by FRC

A year-long campaign to help small and medium-sized enterprises (SMEs) access audit services and cut their reporting burdens has been launched by the Financial Reporting Council (FRC).

The initiative aims to improve their access to capital and to support their growth ambitions.

In a statement on its website the FRC said: “Access to audit is often important in supporting SMEs to secure the capital they need to scale, creating wealth and jobs. However, the FRC is aware of some challenges faced by SMEs to secure audit services at a proportionate cost, which may affect their ability to grow, and in how auditing standards are interpreted and applied.

“While the FRC’s focus has traditionally been on the largest businesses, we believe there is more we can do to help SMEs too. As set out in the FRC’s draft three-year strategy published in December 2024, the campaign will examine how SMEs undertake financial reporting, use and access audit to access capital, and how the FRC can help audit firms apply audit standards proportionately to these smaller, lower risk and less complex companies.”

The campaign will feature extensive and open engagement with stakeholders including SMEs and their representatives, their capital providers, auditors who provide services to SMEs, and their professional bodies, the FRC added.

FRC chief executive Richard Moriarty said: “SMEs are an important bedrock for the UK economy as drivers of innovation and job creation with their ability to access capital often dependent on having audited accounts. I’m keen that the FRC does what it can to support their growth and their ability to scale up.

“This campaign across 2025 is focused on analysing how the audit market is working for SMEs, including the reporting and audit requirements they face, and ensuring they are audited proportionately including considering any steps the FRC can take to support this vital part of the UK economy. We look forward to engaging and listening from SMEs and those who represent them, their capital providers, and others with an interest in this important work.”

SMEs represent more than 99% of all private sector businesses, with a combined turnover of around £2.75 trillion (52% of total UK business turnover), employing around 16.6 million workers.

“SMEs are an important bedrock for the UK economy as drivers of innovation and job creation with their ability to access capital often dependent on having audited accounts. I’m keen that the FRC does what it can to support their growth and their ability to scale up."

Richard Moriarty, FRC chief executive