The UK government has today published plans which aim to revamp the UK’s corporate reporting and audit regime through a new regulator, greater accountability for big business and by addressing the dominance of the main audit firms.
The plans, which build upon the recommendations of independent reviews by Sir John Kingman, Sir Donald Brydon, and the Competition and Markets Authority, were published today (31 May) in the government’s response to a public consultation on audit and corporate governance reform.
The government response sets out reforms that include:
- establishing a new regulator, the Audit, Reporting and Governance Authority (ARGA),
- recognising the public interest in large private companies, by ensuring they meet the same high standards of reporting and accountability as are expected from large listed companies
- making large companies’ reporting more useful, with better information about the risks they face
- strengthening reporting about companies’ internal controls
- improving the quality of audit and making it more informative,
- boosting resilience, competition and choice in the audit market, through the introduction of a ‘managed shared audit’ requirement for FTSE 350 companies, and requiring an operational separation of audit and non-audit practices
- making directors of the country’s biggest companies more accountable for significant failures in their corporate reporting and audit related duties
- strengthening oversight of the accountancy and actuarial professions to build confidence in the professions and in the UK.
Today’s publication also sets out the full range of measures the government is taking starting with a new Ministerial Direction issued today – an immediate step being taken to strengthen the regulator’s oversight of the audit profession.
A summary of the proposals can be found here Audit regime overhaul to help restore trust in big business - GOV.UK (www.gov.uk)
Chartered Accountants Ireland responded to the Brydon and Kingman reviews.