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The UK Department of Business and Trade (DBT) has announced plans which seek to modernise Corporate Reporting requirements and make it easier for businesses to grow and invest. Some of the plans which DBT intend to bring forward include: An exemption for most medium-sized companies from the need to produce a Strategic Report. DBT have noted that this would mean that “medium-sized businesses who can benefit from existing exemptions will no longer need to prepare narrative reporting, so they can focus on running their business rather than producing information that is disproportionate to their scale and ownership model”. An exemption for wholly-owned subsidiaries from producing a strategic report if they are covered by the reporting of a UK parent. DBT have stated that this proposal would “eliminate duplicative reporting within corporate groups”. A removal of the requirement for preparing a Directors Report. The Department have noted that this report is often seen as a “cluttered, compliance-driven document that has accumulated numerous disclosures over time, which offers little useful insight for investors”. Under the proposal, some requirements which are deemed to be more useful, such as reporting on energy and emissions, would be retained and moved elsewhere in the Annual Report. In its announcement, the Minister for Small Business and Economic Transformation indicated his intention to deliver the proposed changes “as quickly as possible” In addition to the above proposals, DBT have announced an expansion of their non-financial reporting review to include financial reporting, remuneration reporting and governance reporting, as well as considering how reporting can be modernised for the digital age. In view of this expansion, the previously named “non-financial reporting review” will be renamed the “Modernisation of Corporate Reporting review”. To address this, DBT have announced its intention to hold a consultation on the corporate reporting framework next year. It has also issued a survey asking businesses to raise any issues they might have regarding regulation which is not fit for purpose.

Chartered Accountants Ireland has responded to the Financial Reporting Council's (FRC's) invitation to comment on the Practice Note (PN) Guidance for audits of smaller and/or less complex entities in the UK.  The FRC launched a consultation on a PN to support auditors in the application of International Standards of Auditing (ISAs) UK when auditing smaller and/or less complex entities. This consultation is part of the FRC’s year-long SME campaign.  As a general overarching point, Chartered Accountants Ireland does support the development of additional guidance in principle as small and medium-sized practices (SMPs) need to be able to apply ISAs UK in a scalable and proportionate manner given current challenges experienced in the small and medium-sized enterprise (SME) audit market. A key element of our response outlines that a more preferrable course of action (rather than introduction of a PN) would be to begin the process to adopt the International Auditing and Assurance Standards Board’s (IAASB) International Standard on Auditing for Audits of Financial Statements of Less Complex Entities (‘ISA for LCE’), with public consultation on adoption of the ISA for LCE being a necessary step in the process.  Chartered Accountants Ireland has also responded to specific FRC consultation questions outlining enhancements and changes needed to the current version of the PN.  The main item we highlight throughout our response to the consultation relates to the fact that the PN, in its current form, is difficult to apply and use due to the lack of alignment mapping to the underlying ISAs, which would aid ease of reference when navigating the ISAs and would help SMPs apply ISAs in a more scalable and proportionate manner. In addition, we have recommended certain enhancements to the PN content and wording including examples provided in the PN to support SMPs with implementing the guidance more effectively and proportionately particularly in the context of the following ISAs: ISA (UK) 315 Identifying and Assessing the Risks of Material Misstatement ISA (UK) 240 Fraud ISA (UK) 500 Audit Evidence ISA (UK) 570 Going Concern ISA (UK) 540 Estimates ISA (UK) 330 Auditor’s Responses to Assessed Risks ISA (UK) 600 Special Considerations - Audits of Group Financial Statements (Including the Work of Component Auditors) Revised Ethical Standard 2024

From the Professional Accountancy team…... The Apply AI Strategy was launched in October 2025 by the European Commission. It aims to harness AI’s transformative potential by increasing and supporting AI adoption and integration across key industrial and public sectors, especially among small and medium-sized enterprises (SMEs). The Strategy encourages an AI first policy where AI is considered as a potential solution whenever organisations make strategic or policy decisions, taking into careful consideration the benefits and the risks of the technology.  The European Commission has also launched the AI Act Single Information Platform and the AI Act Service Desk to support implementation of the AI Act and to provide resources and tools regarding the AI Act requirements.