Scotland’s accountancy body has expressed concern that the UK government may dilute or even shelve elements of long-delayed audit and corporate governance reforms.

The Institute of Chartered Accountants of Scotland (ICAS) has urged against what it fears will be a “race to the bottom” that could jeopardise hard-won progress on corporate accountability.

It comes as the Labour government encourages regulators to focus on growth rather than risk when deliberating on contentious issues.  

UK Business Secretary Jonathan Reynolds has previously promised to push through the long-delayed reforms and a draft Audit Reform and Corporate Governance bill was included in Labour’s King’s Speech.

But government sources say the reforms were now seen as “ancient history” because tighter auditing requirements were viewed as “another barrier, a ceiling to growth”.

ICAS chief executive Bruce Cartwright said:  “We know how important economic growth is to this government and the country.

“But we strongly believe that the original objectives of the proposed Audit Reform and Corporate Governance Bill – promoting accountability and safeguarding trust – remain critical.

“The arguments for this reform have already been made and won, and are widely recognised as being needed across the different parties, so we mustn’t lose sight of this.  

“These reforms, initiated following the findings of the Kingman, CMA and Brydon reports, are essential if the UK is to maintain and protect its global reputation as a trusted and stable business environment.”

As the new Competition and Markets Authority chair Doug Gurr promises to shift the focus of its deliberations, Mr Cartwright said: “Regulation should not be viewed as the enemy of growth, but as a framework that supports it by providing the public and investors with greater confidence that the UK is a safe place to do business.  

“We urge the government not to dilute these reforms in a way that could lead to weaker oversight of board decision making or compromise the UK’s high standards.

“Instead, we advocate for carefully crafted legislation that strikes the right balance between supporting growth and avoiding unnecessary burden on businesses, through proportionate, purposeful regulation that builds on what has already been achieved on a voluntary basis. 

“We want to continue working with policymakers to make sure the final proposals achieve these vital objectives for the economy, businesses and society.”