The government’s decision not to press ahead with the long-anticipated reform to audit has been called ‘a setback for audit and corporate governance’ by ACCA.
Commenting on the move, ACCA’s executive director, strategy and governance, Maggie McGhee, said: ‘Legislation to establish the Audit, Reporting and Governance Authority (Arga) should have proceeded without delay… Establishing Arga would have given businesses certainty and ensured the UK maintains its reputation for the highest standards of corporate governance.
‘We cannot hide our disappointment and our disagreement with this decision, which we thinks makes no sense.’
‘Businesses do not grow where corporate governance is below par’
McGhee points out that the time to reform and strengthen corporate governance is ‘when we are in a relatively good place, not when we are in the midst of a corporate governance and audit failure crisis’.
ACCA says it completely disagrees with the idea that the need for reform is less pressing, adding that ‘businesses do not grow where corporate governance is below par’.
‘We will work with other stakeholders and the government to see that the FRC [Financial Reporting Council] works as well as possible,’ says McGhee. ‘The first step is for the government to do what it has said and put the FRC on a proper statutory footing. Please stop the delay now.’
More information
See past coverage of the proposed reforms in AB: Audit reform’s unfulfilled promises, Audit’s bright future, Audit reform back in sight? Waiting for Arga and The benefits of audit reform
