Mid-sized firms support audit reform ahead of BEIS proposals

According to a survey carried out by Kingsley Napley, leaders from mid-sized accounting firms support reform but are calling for restraint on treating the industry as uniform

Mid-sized accounting firms support audit reforms ahead of soon-to-be published BEIS proposals, according to a survey carried out by law firm by Kingsley Napley.

The majority of industry leaders polled, who represent 11 firms with a UK turnover between £20m to £500m, also called for restraint on treating the industry as uniform, however.

Publishing of the Department for Business, Energy and Industrial Strategy (BEIS) report on audit reform is reportedly over a month late, after failing to materialise despite being due on 8 February.

Among the recommendations for reform are an emphasis on ring-fencing audit divisions and an overhaul of the Public Interest Entity (PIE) audit market.

Opinion was split on whether reform would create more red-tape for auditors.

Julie Matheson, Kingsley Napley’s accounting advisory partner, said: “Whilst most accounting leaders accept reform is coming, the consensus of those we spoke to is that the few large accounting firms, which primarily audit significantly sized PIEs, should be treated separately to the many firms that do not cover this market. 

“Mid-market accounting firms would like to see a future regulatory regime that is proportional, both for their own businesses and for their audit clients.”

 She added: “We understand the Government intends to consult on its White Paper proposals once published and hope it will listen to the industry before embarking on a one- size-fits-all approach.  

“Meanwhile accounting firm leaders should start modelling the impact of potential regulatory changes so that they are well placed to respond quickly once the detail is known.” 

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