
The Chartered Institute of Public Finance and Accountancy (CIPFA) has welcomed the local audit system reform in England, while stressing the requirement for a focused remit to prevent duplication.
This view was outlined by CIPFA Public Financial Management director Iain Murray, while responding to the Ministry of Housing, Communities and Local Government’s ‘Local audit reform: a strategy for overhauling the local audit system in England’ consultation.
Murray backed the consultation on local audit reform’s aim, to address the current challenges and backlog in local audits that affect timely financial reporting.
The local audit reform strategy introduces measures aimed at repairing the system, including a vision with eight core principles and the creation of a statutory and independent Local Audit Office (LAO) with five strategic responsibilities.
This strategy also mandates the formation of audit committees.
CIPFA believes that the LAO should serve as an escalation point for auditors with concerns, potentially functioning as an early warning system for both the local audit system and the sector.
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By GlobalDataHe further stated: “We also strongly advocate for the reform of local authority accounts. It’s crucial that we do not let the pace of reform stall while we wait for a new body to take shape.
“CIPFA is committed to ensuring that the financial reporting framework for local government is fit for the future, and we look forward to working with the government and other partners to make this a reality.”
The government is seeking feedback on various proposals, such as potential additional functions for the LAO and simplifying financial reporting requirements.
The intention is to ensure that these requirements are proportionate, and to enhance capacity and capability within the local audit sector.
CIPFA and the CIPFA/Local Authority Scotland Accounts Advisory Committee have been exploring improvements to financial reporting under the Code of Audit Practice.
Stakeholder feedback has indicated numerous problem areas within financial statements, with many parts of the standard setting and regulatory framework being labelled as barriers to improvement.
In addition, CIPFA has relaunched the Better Reporting Group (BRG), focusing on enhancing user experiences with accounts.
The BRG aims to recommend practical measures that can improve the value of local authority accounts for users.