11th June 2019
The Government is at risk of "kicking vital audit reforms into the long grass" if it doesn't act soon, the Business, Energy and Industrial Strategy (BEIS) committee has warned.
This follows a report published by the BEIS committee on the future of audit, which called for changes to tackle conflicts of interest in the market.
It endorsed an earlier proposal from the Competition and Markets Authority (CMA) for an operational division of audit and non-audit services in the Big Four accountancy firms, but went further in suggesting a full, structural break-up.
In response, the Government said it was currently, or would shortly be, consulting on many of the recommendations raised in the report.
Rachel Reeves, chair of the BEIS committee, wrote to Business Secretary Greg Clark to ask for a timetable and deadline for these consultations.
She also requested confirmation that the Government would focus on implementing the proposals, not on revisiting the analysis.
"Their response to our report suggests the Government is in danger of kicking vital audit reforms into the long grass. We should not wait for the next corporate collapse.
"The Government needs to ignore the lobbying of vested interests in audit and set out a clear timescale for delivering on the substance of the CMA and the BEIS committee's recommendations."
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