Commenting on the Government’s ‘Restoring Trust in Audit & Corporate Governance’ consultation, Hywel Ball, EY UK Chair, says:
“Today’s consultation marks a significant step towards a stronger UK corporate governance and audit ecosystem. Overall, the consultation contains proposals that could ensure the UK economy remains internationally competitive and builds on its legacy of leading the world on accounting standards and governance. These reforms will help the UK remain an attractive place to do business. In the long-term, investors seek stable, well-regulated environments.
“The Government is right to progress the key recommendations of the Brydon review. For audit to serve a broader set of stakeholders and keep pace with changing expectations, the scope of audit needs to be expanded and clarified on areas such as Environmental, Social and Governance reporting, and fraud.
“The introduction of a new regulator alongside tighter accountability for directors as part of a UK equivalent of the US Sarbanes Oxley framework is essential. While reform needs to remain proportionate for businesses in the current challenging environment, the experience in the US shows these changes can build long-term value, improve trust and resilience, and ultimately reduce the cost of capital. This value increase far outweighs the cost of additional regulation.
“Having launched this consultation, it’s important the Government maintains momentum on turning these proposals into reality. The profession is already taking its own steps towards reform, and the Government’s reform package needs to be introduced in unison: a piecemeal approach will be less effective.”
Read more about the Government consultation.