The government’s approach to audit reform is half-hearted at best

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The government has, at long last, published its planned approach to audit reform.

The proposals are watered down from the inadequate suggestions first made by it more than a year ago. Most issues needing to be addressed are tackled in a most half-hearted way. The consequence if a damp squib unlikely to resolve any known problem or appeal to anyone.

As I said in a comment for a press release last night:

Audits are fundamental to the smooth operation of market economies. When audits fail thousands of people can lose their jobs and millions of pounds are lost by those owed by failed companies at cost to other businesses and society in terms of taxes not paid.

As recent audit failures like Patisserie Valerie, Thomas Cook and BHS have shown, reforms fail to shake-up the audit profession are urgently needed. Unfortunately the government’s proposals fall well short of what is required. Much more must be done to tackle conflicts of interest faced by auditors, to reform the data subject to audit to make sure it meet user needs, and to require that auditors properly sound the alarm over business risks. Audit might not be the most exciting issue but it is important, and these half-hearted reforms fail us all.

I will be writing more on this later today after fulfilling commitments to write on it for others in the first instance.