The UK, as the land lies

It feels like a moment of great uncertainty.

Just as efforts to reform and modernise the auditing process move into full swing, unforeseen consequences and other factors are creating challenges for auditors- to the concern of companies and investors that rely on quality audits.

A broad set of voices from academia, accountancy firms and institutes spoken to agree the audit process needed changing. Financial scandals in the UK including the collapse of retailer BHSand the insolvency of outsourcing giant Carillion, paved the way for a replacement to the discredited regulator the Financial Reporting Council (FRC).

The King’s Speech in July provided in the Draft Audit Reform and Corporate Governance Bill legislation to create re-invigorated regulator ARGA (the Audit, Reporting and Governance Authority).

Three heavyweight reviews recommended ARGA should have powers to investigate and impose meaningful sanctions, while strengthening the transparency and integrity of the UK’s corporate governance, financial reporting and audit.

Accountancy body ICAEW warmed to draft reforms, saying they provided the “wider remit professional bodies have called for” while the Investment Association said putting ARGA on a statutory footing will provide a boost to trust, transparency and accountability.

Read more on the Circit website.