Proposals to reform the UK’s audit and corporate governance regime should proceed as planned despite the current political turmoil, representatives of the accountancy profession, business and regulators told an event last week jointly hosted by ICAEW Manchester and Alliance Manchester Business School (AMBS).
However, delegates also emphasised that the government should listen to business with regard to the detail of implementation, and beware of unintended consequences.
Following a number of high-profile corporate collapses, the government has undertaken a string of reviews into the audit sector to enhance audit quality, increase competition, reduce conflicts of interest, and improve regulatory oversight.
In response to more than 600 formal submissions, the Department for Business, Energy and Industrial Strategy is now drafting a bill on reforming audit and corporate governance that, among other things, will lead to a new statutory regulator, to be known as the Audit, Reporting and Governance Authority (ARGA). This will take over and build upon the existing functions of the Financial Reporting Council (FRC).
Addressing the event in Manchester last week Lord Callanan, under-secretary of state for business, energy and corporate responsibility, told an audience of business leaders, accountants, academics and students, “We are definitely proceeding with drawing up the legislation, and I am hoping to get a parliamentary slot to introduce it.”
Rod Sellers, president of ICAEW Manchester, who chaired the event, said, “Whatever might be going on at Westminster, our speakers and delegates made it clear that the government should not become distracted from proceeding with these vital reforms.
“During his speech Lord Callanan emphasised the importance of strong corporate governance to the UK’s competitiveness. He acknowledged that measures to increase confidence in audit and corporate governance would ultimately be pro-growth, by decreasing the cost of capital for well-run companies, and I urge our political leaders to remember this as and when the government stabilises and is able to focus on producing a legislative timetable.”
- ICAEW Manchester is the district society of the Institute of Chartered Accountants in England and Wales (ICAEW) for the Great Manchester area. It represents more than 5,000 local ICAEW members and over 600 ACA students, and hosts a varied programme of professional development and business events throughout the year.