23 March 2020: now Sir Donald Brydon has issued his report, the tenor and tempo of the audit reform debate can now change. ICAEW’s Michael Izza outlines the five clear goals.

Establish ARGA

The first must be to establish ARGA. We are not alone in seeing an effective regulator as the prerequisite for serious reform, but the current BEIS timetable for doing this, by April 2022, runs the risk of making the perfect the enemy of the good.

An inclusive audit profession

There is much in Sir Donald Brydon’s vision that we support, not least ensuring that the role has the status to attract and keep the best talent, and to operate effectively in competitive and hierarchical organisational environments.

A more reliable core audit

Auditors need a renewed focus on internal controls, going concern and viability and fraudulent financial reporting. The vast majority of business failures are not the fault of the auditor, but when audit quality is a contributory factor, the problem generally involves one or some of these three fundamental areas.

On-demand audit extras

Assurance of virtually any area of corporate activity is possible, and we would welcome a mechanism that allowed additional checks to be commissioned by a range of stakeholders, to supplement the statutory audit.

Pre-tested requirements

We advise the government to look – and listen - very carefully before it leaps: that it considers, carefully in advance, the impact of new measures on the financial reporting system and the wider attractiveness of the UK as a place to do business.

Read Michael Izza’s full blog here.