New UK business trends and wider socio-economic factors mean that auditors face a fresh set of challenges to ensuring financial integrity in 2025. Discover the main changes impacting the industry and how these must be addressed to safeguard accuracy and compliance when reviewing company accounts.
- Assessing ESG criteria
Environmental, Social, and Governance (ESG) factors have been a consideration for businesses since the turn of the millennium, but the growing global focus on sustainability has catapulted these to the top of the priority list for many companies. Being able to demonstrate responsible behaviours is central to winning customers and investment, and providing quantitative data is key to substantiating claims and securing grants.
Understanding a company’s unique ESG goals will make it easier to audit their finances as they go through transition periods. Considering the potential financial implications of any changes will make it easier to spot the monetary benefits and any anomalies in accounts. Request the latest reports and analyse previous accounts against the latest information to identify measurable data to support claims. These could be cost reductions due to sustainable switches or increased profits due to greater productivity.
- Following tax law changes
UK tax law changes frequently and often unexpectedly, so staying abreast of the latest government guidelines is an essential requirement for auditors. This is proving especially challenging in 2025 as new tax simplification strategies outlined in the Spring Budget were followed immediately by turbulence with US trade tariffs.
Failing to properly interpret tax law can lead to an unintentional breach of contract with a client that could be hugely costly in terms of money and reputation, for them and for you. It’s good practice to be covered with an accountant’s insurance policy for a layer of protection should this occur. When in doubt, consult a tax expert to ensure business operations are compliant with the law.
- Managing mergers & acquisitions
Mergers and acquisitions (M&A) are an inherent part of today’s corporate landscape and have been on the rise again in the last couple of years following a brief fall in 2020. Auditors play a vital role in evaluating the financial health of both companies and presenting an accurate assessment of both potential risks and projected benefits.
Audits for M&A present numerous difficulties. Intangible assets such as intellectual property are notoriously difficult to value, and you could be tasked with advising businesses on how something like branding translates into monetary terms. A deep understanding of both companies and their journey from formation to present is essential in ensuring the deal is fair, with total financial transparency on either side. Look out for material misstatements which could cause reputational damage and financial loss.
Managing integration risks is also crucial. Auditors need to ensure that new processes are aligned with existing financial systems and that due diligence has been conducted effectively by both companies. By carefully monitoring these aspects, you play a valuable role in mitigating potential post-merger risks, safeguarding the financial integrity of the combined entity.