Audit and Corporate Governance Reform 2023-11-30
2023-11-30
TAGS
Response quality
Questions & Answers
Q1
Partial Answer
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Context
The question follows a period of promised reforms but no legislative action. The Financial Reporting Council's capabilities have been strengthened but specific legislation remains pending.
What recent progress has the Department made on bringing forward legislative proposals for audit and corporate governance reform, given that significant reforms to the FRC have already been delivered?
We remain committed to reform. Significant reforms have already been delivered to the Financial Reporting Council to strengthen its capabilities and drive up audit quality.
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Assessment & feedback
Did not address specific legislative progress beyond FRC reforms
Response accuracy
Q2
Partial Answer
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Context
The Government have excluded a Bill promised since 2021, prompting criticism that this is a lost opportunity for UK businesses. The Institute of Chartered Accountants of Scotland has also criticized the decision.
Why did the Government leave the audit and governance reform Bill out of the King's Speech when it was promised in 2021? Is there a reconsideration to make the corporate regulatory framework fit for purpose?
Time and again, Opposition parties seek to wrap businesses up in red tape, whereas Conservatives are keen to cut red tape. Consultation with businesses revealed concerns about imposing additional reporting requirements, while the Government are looking to simplify and streamline existing requirements.
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Assessment & feedback
Did not address exclusion of Bill from King's Speech or consider re-inclusion
Response accuracy
Q3
Partial Answer
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Context
Business collapses like Wilko, Carillion, Thomas Cook, and Patisserie Valerie have highlighted the need for audit reform. Previous recommendations and draft Bill commitments from the Government.
Wilko's business collapse is a consequence of audit process failures, costing jobs and hurting investors. Given the 2019 recommendation by BEIS Committee and promised draft Bill, does the Minister agree that urgent action on audit reform is necessary to prevent such collapses?
I was delighted to give the Select Committee evidence on Wilko. The administration report is continuing and clearly we need to see the findings, but investigations so far have not shown that director misconduct played an instrumental part in Wilko's failure.
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Assessment & feedback
Did not directly address urgency of action or specific audit reform recommendations
Response accuracy
Q4
Partial Answer
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Context
The Government has promised legislative improvements on financial checks for three years but have not delivered. The Financial Reporting Council's effectiveness is questioned by businesses, regulators, and auditors.
Financial transparency and accountability are essential components of economic stability. Given that the Government has been promising legislation for three years with no delivery, how can they justify leaving the audit and governance Bill out of the King's Speech when it is supported by many?
We work very closely with the Financial Reporting Council. The FRC has changed its approach completely under Sir Jon Thompson and is now a more effective regulator, following up on this good work.
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Assessment & feedback
Did not justify exclusion of Bill from King's Speech or address support for it
Response accuracy