Auditing association, The Chartered Institute of Internal Auditors (IIA) has urged the government to introduce legislation to establish a new audit regulator before the end of 2019 “under the swiftest possible parliamentary timetable”.
The institute has responded to the recommendations of Sir John Kingman’s independent review of the Financial Reporting Council (FPC).
It has called for the abolition of the FPC, and called for a new audit regulator, with a new board of directors, who would be given power by a law change to impose sanctions to relevant directors for misconduct.
They have also called for a widening of the definition of a public interest entity beyond premium listed companies, in order to subject large private companies to the same corporate governance and audit regulations for premium listed firms.
Dr Ian Peters, chief executive of the IIA, said: “A long delay to the replacement of the audit regulator, caused by increasing levels of political uncertainty, could increase the risk of more Carillion-style corporate collapses which have cost thousands of jobs and millions of pounds of taxpayer’s money.’
‘Replacing the FRC with the new Audit, Reporting and Governance Authority must be the government’s number one priority in raising corporate governance standards in the UK. A new audit regulator should be established under the swiftest possible parliamentary timetable with the legislation introduced in 2019. That means radical reform of the audit regulator taking months, not years.”