Government abandons Audit Reform Bill

The now-defunct Audit and Corporate Governance Reform Bill had, among other reforms, aimed to create a new definition of public interest entity, to hold company directors to account for existing corporate reporting responsibilities and to create a new regulator with stronger powers. 

According to Department for Business and Trade the decision to scrap the Bill was made to “avoid significant new costs" for large organisations. 

A letter from the Minister for Small Business and Economic Transformation, Blair McDougall, to the Chair of the parliamentary Business and Trade Committee, confirmed that with growth and the reduction of administrative burdens key priorities, that it would “not be right” to prioritise the introduction of measures that would increase costs for businesses.

“We intend to focus instead on the simplification and modernisation of corporate reporting. We want to make the UK’s reporting regime the most streamlined and proportionate in the world,” he wrote.

Another key factor in the decision, according to McDougall, was the progress in audit quality and regulation since the collapse of Carillion.

ICAEW’s Chief Executive, Alan Vallance, said: "We cannot hide our disappointment that after many false dawns, the government has decided to scrap the Bill. The government had itself recognised that an Audit Reform Bill would increase global investor confidence in UK companies and increase the prospects of growth."

“Nevertheless, with the changes the profession has made, audit quality and firm governance and resilience are in a very different and vastly improved place from where they were in 2018.”