• Register
Return to: Home > News > UK government urged to introduce new audit regulator legislation before year-end

UK government urged to introduce new audit regulator legislation before year-end

The Chartered Institute of Internal Auditors has urged the government to introduce legislation to establish a new audit regulator before the end of 2019 ‘under the swiftest possible parliamentary timetable’. The aim is to ensure the UK has a regulator that is best in class for corporate governance and help reduce the risk of another Carillion-style corporate collapse. 

The Chartered Institute of Internal Auditor’s response to a government consultation on the recommendations of Sir John Kingman’s independent review of the FRC (Financial Reporting Council) has also called for the:

  • FRC to be abolished and replaced by an entirely new audit regulator, putting it on a statutory footing, with enhanced powers and the authority to do its job properly
  • appointment of a board of directors at the new audit regulator, with responsibility for embedding a new proactive regulatory culture with a greater willingness to act swiftly and fully use its new powers
  • new audit regulator to be give the power (through a change in the law) to sanction all relevant directors for misconduct, including disqualification. Currently the FRC can only sanction chartered accountants, which provides a negative incentive for CFOs to surrender their accountancy qualifications
  • widening of the definition of a public interest entity beyond premium listed companies. When BHS collapsed it was a large private company and wasn’t subject to the same corporate governance and audit regulations for premium listed firms.

Dr Ian Peters MBE, Chief Executive of the Chartered Institute of Internal Auditors said: “A long delay to the replacement of the audit regulator, caused by increasing levels of political uncertainty, could increase the risk of more Carillion-style corporate collapses which have cost thousands of jobs and millions of pounds of taxpayer’s money.

“Replacing the FRC with the new Audit, Reporting and Governance Authority must be the government’s number one priority in raising corporate governance standards in the UK. A new audit regulator should be established under the swiftest possible parliamentary timetable with the legislation introduced in 2019. That means radical reform of the audit regulator taking months, not years.”

Top Content

    South Africa: sensing new opportunities

    It has been an interesting couple of years for the profession in South Africa. A number of high-profile scandals have brought the profession and the role of auditors into sharp public focus, brewing a distrust towards accountants and a large expectations gap. Joe Pickard reports.

    read more

    Ghana: a quest for consistency

    Ghana’s current economic profile would suggest a fertile landscape for purveyors of accounting services. But inconsistent approaches to compliance and application of standards – coupled with problems in the banking sector and consequent liquidity constraints – have created a challenging environment. Paul Golden writes.

    read more

    Drone technology: audit takes to the skies

    The movement towards a digitised era has already impacted the auditing profession in a number of ways, from blockchain to artificial intelligence. Now firms are taking to sky and using drone technology in their audits. Mishelle Thurai speaks to Big Four firms to find out more.

    read more

    SBC: a new alliance joins the market

    Jonathan Minter speaks to Paul Tutin, chair of founding firm Streets Chartered Accountants, about why the business and its European partners took the decision to launch their own association.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.