The government should bring the Audit Reform Bill forward now, says ICAEW’s Chief Executive Alan Vallance, as the government announces that the draft Audit Reform and Corporate Governance Bill will not be put forward for prelegislative scrutiny in the current parliamentary session. 

In a letter to Business and Trade Committee Chair Liam Byrne MP, Justin Madders MP, Minister for Employment Rights, Competition and Markets at the Department for Business and Trade, cited the volume of legislation before parliament as the reason for the delay. 

“As you already know, the reforms that we are proposing are important and will support long-term investment in UK companies, reduce the harm that financial reporting errors can do to businesses and communities up and down the country, and help ensure quality audit for all businesses that need it,” he wrote. “Consequently, the government will use the additional time now available to ensure that our reforms are as robust as possible and address the challenges of the future.” 

The government will conduct further consultation with stakeholders over the next few months to “continue to refine our proposals”. Madders pointed out that market oversight has improved dramatically since the collapse of Carillion. 

“We intend to continue to listen closely to business, ensuring that our reforms strike the right balance between oversight and assurance for investors, while not placing unnecessary additional burdens on business,” he wrote.

Vallance says that ICAEW recognises that the current geopolitical and economic climate, and the government’s work on trade deals and the Industrial and Trade Strategies may have resulted in certain initiatives to be reprioritised. 

“But an audit and corporate governance reform bill has been on the stocks for almost a decade, through successive governments and eight Secretaries of State for Business,” he says. “These reforms are a big part of the government’s correct prioritisation of a growth mission designed to attract capital and investment, making the UK the best place to start and scale up a business.”

Vallance highlighted that the professional and business services sector is one of the government’s eight critical growth sectors. “Not only does the sector plan highlight accountancy, audit and tax as a key frontier industry designed to boost growth, it cites the Audit Reform and Corporate Governance Bill as a key measure to enable this to be achieved.”