The U.K. government is joining up the dots on the need for trust to build a strong commercial ecosystem for business. It intends to broaden the remit of audit, introduce new reporting obligations on businesses, and break the dominance of the Big Four accounting firms by requiring the use of smaller “challenger” firms by large companies. It would back up the new accounting regulator ARGA by legislation funded by a mandatory levy on industry with stronger powers of enforcement, in plans announced today.
Under the UK’s Corporate Governance Code, companies could be expected to write into directors’ contracts that their bonuses will be repaid in the event of collapses or serious director failings up to two years after the pay award is made, said the Department of Business, Energy and Industrial strategy (BEIS) as it launched a consultation to last 16 weeks.
“Restoring business confidence, but also people’s confidence in business, is crucial to repairing our economy and building back better from the pandemic. When big companies go bust, the effects are felt far and wide with job losses and the British taxpayer picking up the tab. It’s clear from large-scale collapses like Thomas Cook, Carillion and BHS that Britain’s audit regime needs to be modernised with a package of sensible, proportionate reforms” said, Kwasi Karteng, Business Secretary.UK To Overhaul Audit, Address “Real Life Consequences” Of Failures In Audit And Corporate Governance — Dina Medland