The data from AFRC’s latest annual reports is unambiguous and alarming. In 2023-24, the regulator conducted its first-ever inspections of non-PIE practice units, examining just 13 Category D firms. By 2024-25, this number had exploded to 32 firms—a staggering 146% increase that represents the most significant year-over-year growth in any inspection category in AFRC’s history.

This dramatic escalation signals that AFRC’s oversight of Category D and E firms has evolved from an introductory phase to a performance-based enforcement regime with real consequences for poor results. Anti-Money Laundering and Counter-Terrorism Financing compliance has also emerged as a critical new area of AFRC attention, with assessments expanding from 42 practice units in 2023-24 to 51 units in 2024-25—a 21% increase that signals growing emphasis on this previously overlooked area.

With Category E firms dominating the non-PIE audit market with 195,274 audit clients (67% market share) and Category D firms serving 48,557 clients (17% market share), the implications for individual practices are profound and immediate. The regulator’s expanded mandate now encompasses comprehensive oversight with potential enforcement consequences that can fundamentally impact your practice’s viability and reputation.