The announcement is a response to the BEIS Select Committee’s consultation on delivering audit reform.
Key policy asks within the Chartered IIA’s response include:
- Bringing forward legislation to strengthen the regulator without delay – to avoid further limitations on the action the FRC can take to address serious issues.
- Ensuring consistency in implementing recent proposals from the FRC to split up the Big Four’s audit practices – given the risk firms could interpret the proposed principles differently, the Chartered IIA is calling for greater consistency in applying them at an operational level. Something the Chartered IIA believes is fundamental to their effectiveness and to ensure a level playing field
John Wood, chief executive officer of the Chartered Institute of Internal Auditors, said: “The government made a pledge to act swiftly on audit reform in March 2019 and we agree with the urgent need to now take action to resolve these issues.
“Front and centre of any reform package should be the establishment of an effective audit regulator with the authority to do its job properly.
He added: “Strengthening the FRC by putting it on a statutory footing and renewing its powers – including the ability to sanction directors for misconduct – will signal the UK means business when it comes to effective audit.
“Our Internal Audit Code of Practice in raising the bar of the internal audit profession is both important and timely, given recent high-profile corporate collapses linked to governance deficiencies. But we now need the government to deliver comprehensive audit reform following the compelling cases made by the Brydon, Kingman and CMA reviews.”