Long years of negotiations and numerous promises have all been for nowt, as the UK government announced it was abandoning its audit reform bill.
The minister for Small Businesses and Economic Transformation, Blair McDougall, said while the planned reforms would be beneficial some would increase costs on business, so “it would not be right to prioritise those over more deregulatory measures. He also felt the need for major reform is now less pressing than it was.
Finally, the bill was up against the government’s ambitious legislative programme and limited parliamentary time. However, McDougall promised to look to put the FRC on a proper statutory footing “as soon as parliamentary time allows”.
The accountancy profession found it hard to hide its dismay. ACCA’s Executive Director – Strategy and Governance, Maggie McGhee, said: “We cannot hide our disappointment and our disagreement with this decision, which we think makes no sense.
“The time to reform and strengthen corporate governance is when we are in relatively good place, not when we are in the midst of a corporate governance and audit failure crisis. So, we disagree completely with the idea that the need for reform is less pressing. Businesses do not grow where corporate governance is below par.”
ICAS CEO Gail Boag agreed the announcement that the UK Audit and Corporate Governance Reform Bill has been scrapped was deeply frustrating.
She stressed: “The whole accountancy sector and even governments themselves have agreed for years on the need for audit and corporate governance reform.”
