In our webinar running through the results of our 2026 Practice Assurance Monitoring Report, we shared findings from more than 2,000 monitoring reviews carried out in 2025. Results showed that 88% of firms either had no matters requiring action or addressed the issues raised without any need for follow-up, underlining that most firms are meeting expected standards.
Our Practice Assurance scheme provides ICAEW member firms and practising certificate holders with a framework of principles-based quality assurance standards to operate to, with firms having free access to a full suite of resources and guidance materials to help them comply with all relevant laws and regulations. The scheme gives clients of our member firms reassurance that they will receive a high-quality level of service.
Most firms continue to meet expected standards
The majority of firms reviewed in 2025 either had no matters requiring action or successfully addressed issues identified during the review process without any follow-up being required. Plus, the results also showed improvements in several review categories: for on-site reviews, firms resolving matters requiring action without follow-up increased from 58% to 65%, while the proportion needing follow-up fell from 21% to 11%. Telephone review outcomes also remained strong.
"As well as identifying areas for improvement, the results show that the vast majority of firms are either meeting the required standards or taking prompt action to address issues identified," said Dean.
Recurring themes
However, the review team saw some recurring compliance issues. We encourage firms to take note of these findings and make use of the guidance and resources we provide to avoid making similar errors.
Anti-money laundering (AML) processes remain a common area where firms experience difficulties. The issues most frequently identified included those with customer due diligence, firm-wide risk assessments, AML training and AML compliance reviews.
Engagement letters and communication with clients also remain important areas for firms to address. Many findings related to firms not adequately explaining their fee structure or complaints procedure, including clients' rights to complain to ICAEW.
"Our updated engagement letter templates and schedules are designed to be helpful resources for firms, though they’re not mandatory to use. Firms can consider adopting them as a way to remember what points to communicate clearly with their clients," explained Hilary. “Even if our engagement letter templates aren’t the right fit for some firms, we do encourage firms to have strong communications in place to manage the public’s expectations around fees and complaints procedures.”
Regulatory housekeeping still matters
The report also identified areas where firms need to remain vigilant, including handling clients' money, professional indemnity insurance and firm eligibility requirements. Issues in these areas often arise from governance and administrative processes rather than technical compliance issues alone.
"Changes to ownership or firm structure can have regulatory implications, so firms should ensure these changes trigger appropriate action. Firms should get in touch with us at the earliest opportunity," said Dean.
Cyber security: a strong foundation with opportunities to strengthen governance
Cyber security was the 2025 area of focus, with detailed discussions held with 121 larger firms. The findings revealed very high levels of awareness across the profession. Almost all firms surveyed (99%) reported a good awareness of cyber security risks and the Cyber Essentials scheme.
Reviewers also found widespread adoption of practical security controls. Security monitoring tools were used by 88% of firms, 90% provided cyber security guidance to staff and 82% delivered cyber security training. Nearly all firms ensured systems were kept up to date with the latest security patches.
Strong controls were evident in several other areas:
• 86% maintained inventories of critical assets;
• 81% had business continuity or contingency plans;
• 82% restricted system access to organisational devices; and
• 73% held dedicated cyber insurance cover.
However, the findings also highlighted opportunities to strengthen governance. Only 45% had formally included cyber security within their organisational risk registers and 29% of firms had not considered security arrangements at their suppliers.
"We observed that firms generally have good awareness and strong technical controls in place. The next step is ensuring cyber security is fully embedded within wider business governance and risk management," said Dan.
Practice Assurance in 2026
The two focus areas for 2026 monitoring are Professional Conduct in Relation to Taxation (PCRT) and working with vulnerable clients, and we have been holding some in-depth conversations with firms on these topics during our reviews so far this year.
Reviewing PCRT is timely given recent regulatory developments in this area and applies to all firms providing advice on UK tax matters, while the vulnerable clients focus recognises the increasing need for firms to identify and support clients whose circumstances may require additional consideration.
“Our approach, as always, is to help firms understand expectations, share examples of good practice and signpost relevant resources,” Dean explains. “We use insights from our reviews to identify where further guidance may be helpful and to develop resources that support firms in meeting their regulatory requirements. The webinars are an ideal way to get feedback from firms, too.”