Long-awaited UK audit reform announcements

Jun 08, 2022
ACCA (the Association of Chartered Certified Accountants) offers a cautious initial welcome to the BEIS announcement about the UK’s corporate reporting and audit regime that aims to bring transparency and accountability for businesses, investors, accountants and auditors.

Mike Suffield, Director of Policy & Insights at ACCA comments: ‘The Government’s announcement talks rightly of the need to build trust in the UK’s corporate reporting and audit. This trust is essential, and the accountancy and audit professions have been waiting a long time for proposals to be clarified.

‘ACCA will need to work through the details of the Government’s proposals, but the main omission at this point looks to be the absence of any legislative requirements upon companies and their directors to report upon internal controls over financial reporting. We saw this option as an important element of a reform programme that should look across the corporate reporting ecosystem as a whole, and not just at the auditors.’

Commenting on other key developments, Mike adds: ‘We’ve been explicit in responses to various consultations over recent years that regulatory reform is vital and so we’re glad to see ARGA being given the teeth it needs to bite.

‘Its ability to ban failing auditors from reviewing large companies’ accounts and to investigate and sanction directors of large companies for breaches of duties around corporate reporting and audit gives it the necessary power to tackle any future issues. And as a professional body, we welcome the opportunity to continue to work with the regulator on their statutory powers to oversee our regulation of the accountancy profession which is core to our purpose.’

Mike concludes with comments about the new review of wider reporting burdens on large and small businesses, saying: ‘Given Brexit, the new review into UK SMEs and the filing / reporting regulations they need to undertake is also timely, but the Government must mitigate against the risk of a departure from global and EU standards and the unintended impact on comparability.’


News source : https://www.accaglobal.com/gb/en/news/2022/may/acca-audit.html