From 1 June 2025, ICAEW-registered firms must notify ICAEW when appointed to certain complex or high-risk audits – and be aware of other new provisions.
New UK Audit Regulations are effective from 1 June 2025. As part of the new requirements, all ICAEW-registered audit firms must notify ICAEW when appointed to certain complex or high-risk audits.
To assist firms there is a six-page ICAEW audit notifications guidance note with background information, worked examples and definitions.
What’s required
Notification will be required if a firm is appointed as auditor to:
- an audit where the audit firm has three or fewer responsible individuals and the audited entity (or group or entities under common beneficial ownership or control) has combined turnover greater than £750m; or
- where the expected first-year audit fee for an entity/group/collection of entities under the same beneficial owner or controlling party is more than twice the firm’s existing highest audit fee, subject to a de minimis of £25,000 for the first-year audit fee; or
- a listed entity; or
- an entity with turnover greater than £750m, or which is an Other Entity of Public Interest under the Financial Reporting Council (FRC) Ethical Standard.
Notification is not required for audits where the firm already needs to notify the FRC of the appointment (this applies for audits of public interest entities and other audits retained by the FRC).
When and how to notify ICAEW
ICAEW-registered audit firms must notify ICAEW:
- within 21 business days of being appointed as auditor of the types of entities listed above; or
- when an existing audited entity meets the criteria for the first time.
Firms will need to notify ICAEW via an online form.
Waiver options for firms with relevant experience
Firms may apply to ICAEW’s Audit Registration Committee (ARC) for a waiver from the 21-day notification requirement if they have relevant experience.
The ARC will issue a waiver if it is satisfied that the firm has substantial experience and capability in carrying out the types of audits that are notifiable.
If a waiver is granted, firms must instead submit the required audit notifications annually, via a specified template alongside their next annual return (from 1 June 2025 onwards).
Sole practitioner alternates
Under the revised 2025 Audit Regulations sole practice auditors are required to appoint an alternate and will have until 1 December 2025 to do so.
This ‘alternate’ provision aims to ensure that another practitioner can intervene in circumstances where a sole practitioner is unable to practice, for example due to serious illness.
Key points about the alternate:
- The role of the alternate is to ensure continuity of services and to effect a transition of audited entities to another auditor. There is no requirement for the alternate to undertake the business of the sole practitioner.
- The alternate can be an ICAEW, ICAS, CAI, or ACCA member.
- The alternate does not need to be a responsible individual.
- The alternate does not need to hold a practising certificate.
Further guidance on the appointment of an alternate will be published shortly.
Provisions with April 2025 deadline
Firms are reminded that 1 April 2025 was the compliance deadline for a new provision in the previous UK Audit Regulations and Guidance, relating to the control of an audit firm and its eligibility to be registered to carry out audit work.
Learn more about key aspects of this and all the necessary steps to ensure your firm continues to be eligible for audit registration.
Use this online tool to check your firm’s current audit eligibility and to monitor this if you have made or are considering making changes to your firm’s structure. Individual ICAEW members can also check by mailing AQ@icaew.com.
Additional resources
ICAEW’s Audit Regulations and Guidance hub offers the latest information on developments, background and links to support resources.
