Lack of action

ICAS calls for audit reform to restore public trust

Bruce Cartwright
Bruce Cartwright: there has been an inexcusable lack of action

Accountancy leaders want the next UK government to reform audit and corporate governance in order testore trust in business and protect people’s livelihoods.

The call from the Institute of Chartered Accountants of Scotland (ICAS) comes after a number of high profile company failures that slipped through the audit net.

Bruce Cartwright, ICAS CEO, said: “We have seen an inexcusable lack of action from the UK government when it comes to audit and corporate governance reform.

“We urge the next government to bring forward the legislation needed to tackle this issue head on. It’s too important to wait and incur even longer delays on this crucial issue of public trust.”

He added: “It’s been six years since the collapse of Carillion, followed by another major failure at Patisserie Valerie. And despite agreement across political parties, businesses and the accountancy profession that reform is needed, we have yet to see any real effort to tackle these issues.

Carillion sign
Carillion’s collapse exposed audit failures

“Corporate failures impact everyone, from shareholders and staff to suppliers and people’s pensions. And while they can’t be prevented, mechanisms can be put in place to make sure that when things do go wrong, contingency planning is improved and the opportunity to learn valuable lessons is increased.

“The public, as well as investors, need to be reassured that audit and corporate governance mechanisms are fit for purpose.”

In addition to audit and corporate governance reform, ICAS is calling for the next UK government to:

  • Invest in our tax system and HMRC: ICAS wants the next government to fund HMRC to a level that means it can deliver a service that is fit for purpose, helps customers, and closes the tax gap.
  • Make UK business more sustainability focused: ICAS calls for the next government to be bolder and adopt comprehensive sustainability reporting standards that reflect the full impact business has on the environment and society. This means quickly putting in place legal mechanisms to enforce mandatory, high quality, international sustainability reporting standards in the UK.
  • Invest in skills and equip the accountancy profession for the future: ICAS asks the next government to support and widen access to the profession through a better system of apprenticeships, which is joined up across the UK. It also wants to see more investment in finance and accounting courses at colleges and universities, where funding has been cut. It wants politicians to support more conversations about doing the right thing, money and budgeting at a much earlier stage in schools.
  • Create clear, consistent, and proportional regulation: ICAS wants the next government to focus on realistic, proportionate, fair and purposeful regulation, which works to protect and improve the UK’s global standing and reputation as a place to do business. It says regulation can support and improve economic growth, but needs to be developed in partnership with professional bodies and business.

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