Details of a long-expected overhaul of the UK’s corporate reporting and audit regime have been confirmed by the Department for Business, Energy & Industrial Strategy (BEIS). The revamp will see the Audit, Reporting and Governance Authority (ARGA) replace The Financial Reporting Council (FRC) as the new corporate reporting and audit regime regulator. According to BEIS, the overhaul is intended to address issues including the perceived dominance of the ‘Big Four’ audit firms, prevent the large-scale collapse of businesses and ensuring more effective corporate reporting and audit to allow investors assess the stability of large companies. The Chartered Governance Institute of UK & Ireland praised the introduction of “infrastructure to improve the quality of the decision-making: good quality, ethical decision-making builds sustainable businesses, enabling them to create long-term value”. Yet, an article by the Financial Times voiced criticism of the plans, suggesting they had been watered down by not including a proposal requiring directors to sign off on the internal controls of companies and reducing the number of companies falling under the strictest requirements. FRC CEO Sir John Thompson said: “The Government’s decision not to pursue the introduction of a version of the Sarbanes-Oxley reporting regime is, the FRC believes a missed opportunity, to improve internal controls in a proportionate, UK-specific manner.” Plans to introduce a draft audit bill were previously announced in the Queen’s Speech.
📣 The new corporate reporting & audit process will:
🟠 forewarn of sudden company collapses
🟠 protect jobs
🟠 introduce a new regulator with greater powers
🟠 increase transparency
🟠 reinforce the UK's reputation as a world-class place to investhttps://t.co/BRMGwHIrJX pic.twitter.com/8TfIgYcZEM
— Dept for BEIS (@beisgovuk) May 31, 2022