Audit reforms ‘need urgent resolution’

The Government should speed up delivering reforms to the audit sector, according to a professional body for internal auditors.

The Chartered Institute of Internal Auditors (Chartered IIA) wants the Government to bring forward a comprehensive reforms package to the under fire audit sector.

That includes strengthening the Financial Reporting Council (FRC) to avoid further limitations on the actions it can take to address issues.

The body also wants the Government to deliver on the FRC’s proposal to split up the ‘Big Four’s’ audit practices. 

John Wood, chief executive of the Chartered IIA, said: 

“The Government made a pledge to act swiftly on audit reform [first announced] in March 2019 and we agree with the urgent need to now take action to resolve these issues.

"Front and centre of any reform package should be the establishment of an effective audit regulator with the authority to do its job properly.”

In July 2020, the Business, Energy and Industrial Strategy (BEIS) select committee reiterated calls for the FRC to be replaced.

At the time Darren Jones, chair of the BEIS committee, said:

"While the Government has a series of priorities at the moment, far more urgency should be shown to help drive through the reforms needed on audit and corporate governance."

Last year, the BEIS committee suggested a full, structural break-up of the audit and non-audit services offered by the Big Four accountancy firms.

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