BDO comments on the BEIS consultation white paper on audit and corporate governance

18 March 2021

Commenting on the government’s consultation paper on ‘Restoring trust in audit and corporate governance’, Scott Knight, head of audit at BDO, said: “Today marks a landmark moment in the UK’s history of audit and wider corporate governance, and this unprecedented opportunity to implement meaningful change must not be squandered.

“The UK competes internationally for the very best companies to list on the London market, and improved corporate reporting will enhance our position as a world-class destination for investors. However, the government’s reforms must be proportionate and carefully managed to recognise the significance of growth markets, particularly as businesses emerge from the pandemic. Here we can learn some important lessons from the US.

“It’s been frustrating to see COVID-19 disruption place a further drag on the pedestrian pace of reform, but we’re encouraged that BEIS’ impetus to deliver a stronger and more competitive audit market has not been lost. Increased powers for ARGA, including the ability to impose operational separations, as well as a potential cap on FTSE 350 audits are particularly welcome measures. Managed shared audits will add unnecessary complexity, however the exemption from shared audits for companies appointing challenger firms is also a positive step.

“Input and cooperation from across UK Plc is now required to ensure audit and the wider corporate governance regime can evolve.”