How to get your company ready to comply with upcoming corporate reform

2 minute read 23 Jul 2021
By Dan Feather

EY UK Financial Accounting Advisory Services Partner

Leads on helping companies improve internal controls over financial reporting, fix accounting and financial reporting issues and build trust and confidence with stakeholders.

2 minute read 23 Jul 2021
Related topics Assurance

To build a roadmap to comply with impending internal controls regulations, companies should run readiness – and risk – assessments. 

On 18 March 2021, the Department for Business Energy and Industrial Strategy (BEIS) published its consultation white paper ‘Restoring trust in audit and corporate governance’.  This paper acknowledges the need for a stronger UK corporate governance and audit ecosystem and sets out key proposals to help ensure that the UK remains a world-class destination for investment.

In this video series, we outline how we are helping companies assess their readiness to comply with the proposals set out in the paper via a consultation paper gap assessment tool. This helps companies identify and prioritise their gaps. We have also developed several other readiness assessment tools to help clients understand their level of readiness in specific areas such as IT, culture or fraud.

How the consultation paper gap assessment tool and the readiness assessment work

How the consultation paper gap assessment tool and the readiness assessment work

Having gained an understanding of what changes might be coming, the next step in the ‘Find’ phase is to run a gap assessment. This takes you through about 50 questions covering internal controls and the other new corporate reporting matters highlighted by the consultation white paper. These include tackling fraud, supplier payment practices, the resilience statement, KPIs, and the importance of a readiness assessment into specific areas such as fraud, IT and culture. 

In the risk assessment phase, we focus on scoping to focus on high-risk areas, and define an efficient scope – since not everything needs to be in scope, spending an hour on scoping can really pay significant dividends if you can take entities or processes out of scope. All of the work done up to this point then feeds into the overall vision and project plan, with options to execute a smarter internal controls framework.

The benefit of running detailed readiness – and risk – assessments is that you get a full understanding of your organisation’s current state, control gaps, remediation needs and will help you build a roadmap to compliance.

Summary

With an ever-increasing focus on corporate reform, regulatory oversight and scrutiny of the work done by directors and management, combined with a strict sanctions regime, possible impending internal controls regulation needs to be front of mind amongst company leaders. Watch our video to find out how to create a plan to comply with these upcoming regulations.

About this article

By Dan Feather

EY UK Financial Accounting Advisory Services Partner

Leads on helping companies improve internal controls over financial reporting, fix accounting and financial reporting issues and build trust and confidence with stakeholders.

Related topics Assurance