Britain urged to move on protracted audit market shake up

Carillion

05/05/2022 11:00

By Huw Jones
    LONDON, May 5 (Reuters) - The collapse of builder Carillion
and other corporate scandals showed a need to act quickly to
improve auditing in Britain, a group of more than 50 businesses,
trade unions and lawmakers have told the government.
    In a letter to British Prime Minister Boris Johnson and
business minister Kwasi Kwarteng, the signatories expressed
"grave concern" over media reports that audit market legislation
will not be included in the upcoming session of parliament.
    Recent scandals exposed gaps in Britain's corporate
governance framework and reduced trust in business, said the
letter made available to the media.
    "These changes are not contentious and have wide support
across the business community and wider society," the letter
said.
    Following the Carillion debacle and collapse of retailer
BHS, three government-backed reviews recommended creating a more
powerful audit watchdog, injecting stronger competition into the
audit market, and beefing up corporate governance.  urn:newsml:reuters.com:*:nL1N2LG0GF
    Many of the reforms need legislation to implement.
    "It is our view that these changes are necessary and
timely," the letter said.
    It also called for updating Britain's companies act so that
directors' responsibilities to shareholders are aligned with
their social and environmental impact.
    The letter was signed by the Institute of Directors, Anglian
Water, the Trades Union Congress and the Better Business Act
coalition.
    A government spokesperson said the government will set out
its legislative programme for the next parliamentary session in
the forthcoming Queen’s Speech on May 10.
    "Our 2021 white paper set out wide-ranging proposals to
tackle problems in corporate reporting and audit, including
strengthening the powers of the regulator, and we will publish
our response to the consultation shortly," the spokesperson
said.
    Without legislation, the current audit watchdog, the
Financial Reporting Council, has resorted to putting pressure on
the EY, KPMG, Deloitte and PwC, the "Big Four" auditors which
dominate the sector, to make voluntary changes to their
operations.  urn:newsml:reuters.com:*:nL2N2WC0A2  urn:newsml:reuters.com:*:nL1N2U50SN
     

 (Reporting by Huw Jones
Editing by Tomasz Janowski)
 ((huw.jones@thomsonreuters.com; +44 207 542 3326; Reuters
Messaging: huw.jones.thomsonreuters.com@reuters.net))