The Association of Chartered Certified Accountants (ACCA) has warned that the government’s audit reform plan will need “continuous careful analysis” of the cost and benefits of implementation.
The association has argued that these reforms involve “radical changes” for a wide variety of stakeholders, including audit firms and auditors, companies and directors and the regulator
In response, ACCA has highlighted six key points which it believes are “fundamental” to achieving these reforms. One of them being the creation of a separate audit profession and new professional body, which the association claims will “further evolve” the audit profession within existing structures.
The association also supports the proposal to provide the regulator with the “necessary” powers to investigate and sanction breaches of corporate reporting and audit-related responsibilities by PIE directors.
However, the group stated that this will add a “further complexity” to the existing arrangements for the oversight of director conduct, and could “hence the effectiveness” of the collaboration across the various agencies.
Maggie McGhee, executive director, strategy and governance at ACCA, said: “It’s imperative that the UK economy has efficient and effective capital markets so that there is confidence and trust in the corporate framework.
“That’s why these reforms are so vital. It is also important that these reforms are globally consistent with other standards, and so the government needs to consider extraterritorial implications that some of the proposals may bring.”