The Financial Reporting Council (FRC) has welcomed the consultation launched by the department for business, energy and industrial strategy (BEIS) to reform the UK’s audit, corporate reporting and corporate governance system.
The government’s proposals follow on from the growing number of large-scale company failures in recent years.
Furthermore, whilst the government claims that the UK is a leading destination for foreign investment, it conceded that investor and public confidence has been undermined by the severe job losses and taxpayer consequences seen in cases such as Carillion, Thomas Cook, and BHS.
In response to the three independent reviews by Sir John Kingman, Sir Donald Brydon and the competition and markets authority, the reformation will aim to enhance the quality of corporate governance, corporate reporting and audit and establish a “strong, effective, independent” regulator.
In response to the move, the FRC stated that these measures have a “vital role to play” in the UK’s future economic success and in shaping the business agenda.
Sir Jon Thompson, CEO of the FRC said: “The FRC is already delivering on its commitment to transform, implementing reform across a variety of areas, where we are able to do so. This includes the operational separation of the Big Four audit practices, stronger and more timely enforcement and revisions to standards to drive higher quality work.
“We will now work with colleagues in government and other regulators to ensure that the UK has an effective and clear regulatory framework, well understood by those we regulate and which supports high standards of audit, corporate reporting and corporate governance; helping to reinforce the United Kingdom’s position as a key global centre for investors and businesses.”