Reform in the audit and accounting sector in the UK has been long discussed and debated, and the sector is likely to see significant change being brought in over the next few years. Our guide explains the impact these reforms are likely to have for both accountants and auditors, and how you can prepare for their implementation over the next few years.
Following the completion of three independent reviews the Government issued a consultation entitled “Restoring trust in audit and corporate governance” in Spring 2021. After reviewing over 600 responses to the paper, the Government has issued its final response. In the paper, they outline significant changes to be brought about to rebuild the public’s trust in the audit of, and corporate reporting by, UK entities. The overall aims of the reform are to enhance the UK’s reputation for high standards of corporate governance and to continue to identify the UK as one of the most attractive locations for investment.
Since September 2020 the Government has been consulting stakeholders on “corporate transparency and register reform”, with the primary aim of reforming Companies House. These reforms have been driven by the need to update the legal framework under which Companies House operates, to align it with an increasingly-digital economy. Furthermore, plans are proposed to expand the role of Companies House to become an active gatekeeper over company data. The changes proposed are significant, and will impact all entities with a registration in the UK.
When the Financial Reporting Council (FRC) published its suite of new accounting standards, FRS 100 – 105, in March 2013 it also announced its intention to carry out periodic reviews of the standards, to ensure they remain fit for purpose for UK entities. The first of these periodic reviews took place in 2017, with changes to the standards applied from 1 January 2018. Being so close to the original publication, these changes were relatively inconsequential for the majority of companies. However, almost a decade since the first publication, the FRC is now looking at potentially significant changes to the standards to align UK GAAP with the international standards on which it is largely based.
The audit and accounting sector has faced many challenges in recent years, including navigating the impacts of the Covid-19 pandemic and the UK’s departure from the EU, and these reforms could bring a new suite of challenges. It is essential that accountants and auditors are well-informed on these matters, to allow them to support their clients through another period of transformation and adjustment. However, these reforms also provide significant opportunities for the UK economy and for the businesses that operate within it, enhancing the quality of financial reporting and regulation, and ensuring the UK remains one of the most attractive locations globally to do business.
Following the completion of three independent reviews the Government issued a consultation entitled “Restoring trust in audit and corporate governance” in Spring 2021. After reviewing over 600 responses to the paper, the Government has issued its final response. In the paper, they outline significant changes to be brought about to rebuild the public’s trust in the audit of, and corporate reporting by, UK entities. The overall aims of the reform are to enhance the UK’s reputation for high standards of corporate governance and to continue to identify the UK as one of the most attractive locations for investment.
Since September 2020 the Government has been consulting stakeholders on “corporate transparency and register reform”, with the primary aim of reforming Companies House. These reforms have been driven by the need to update the legal framework under which Companies House operates, to align it with an increasingly-digital economy. Furthermore, plans are proposed to expand the role of Companies House to become an active gatekeeper over company data. The changes proposed are significant, and will impact all entities with a registration in the UK.
When the Financial Reporting Council (FRC) published its suite of new accounting standards, FRS 100 – 105, in March 2013 it also announced its intention to carry out periodic reviews of the standards, to ensure they remain fit for purpose for UK entities. The first of these periodic reviews took place in 2017, with changes to the standards applied from 1 January 2018. Being so close to the original publication, these changes were relatively inconsequential for the majority of companies. However, almost a decade since the first publication, the FRC is now looking at potentially significant changes to the standards to align UK GAAP with the international standards on which it is largely based.
The audit and accounting sector has faced many challenges in recent years, including navigating the impacts of the Covid-19 pandemic and the UK’s departure from the EU, and these reforms could bring a new suite of challenges. It is essential that accountants and auditors are well-informed on these matters, to allow them to support their clients through another period of transformation and adjustment. However, these reforms also provide significant opportunities for the UK economy and for the businesses that operate within it, enhancing the quality of financial reporting and regulation, and ensuring the UK remains one of the most attractive locations globally to do business.
About the Author
Grant Thornton
Claire Thomson
Claire is a qualified Chartered Accountant with the Institute of Chartered Accountants of Scotland, and trained with Grant Thornton Ireland. She spent 5.5 years in corporate audit, before moving to the firm’s risk & compliance team, where she spent 6 years supporting the all-Ireland practice as their UK financial reporting subject matter expert.
After a year in OmniPro’s Practice Support team, where she delivered webinars, developed technical content and provided post-monitoring support to firms, she has now joined Grant Thornton Northern Ireland, where she is Head of UK Financial Reporting and Accounting Technical, providing UK technical advice and support to local and international offices.
After a year in OmniPro’s Practice Support team, where she delivered webinars, developed technical content and provided post-monitoring support to firms, she has now joined Grant Thornton Northern Ireland, where she is Head of UK Financial Reporting and Accounting Technical, providing UK technical advice and support to local and international offices.