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In the UK, the fire audit sector is set for a long-awaited overhaul

Quasi Quarteng’s “diluted” audit reforms have finally arrived after a series of accounting scandals

  • Business Secretary Kwasi Quarteng today launches his long-awaited response to a consultation on the future of auditors
  • Industry reform is being carried out by the government to reduce the risk of a sudden collapse of companies across the UK
  • One of the goals will be to combat the dominance of the Big Four audit firms, with Quarteng promising to ban auditors who have failed to verify the accounts of large firms.

Business Secretary Kwasi Quarteng today launches his long-awaited response to a consultation on the future of auditors

The audit sector under fire is awaiting a long-awaited overhaul as the government introduces a regulator – despite ministers being accused of softening plans.

Business Secretary Kwasi Quarteng today begins his long-awaited response to consultations on the future of auditors and corporate governance following a series of accounting scandals. The industry is being reformed by the government to reduce the risk of a sudden collapse of companies across the UK following high-profile failures such as Designer Carillion and the BHS department store chain in recent years.

One of the goals will be to combat the dominance of the Big Four audit firms, with Quarteng promising to ban non-working auditors from viewing the accounts of large companies. Company directors also expect large fines if they lie about the state of the firm’s finances.

Business Minister Lord Callanan said: “By restoring confidence in auditing and corporate reporting, we will strengthen the foundations of the UK plc so that it can stimulate growth and job creation across the country.

“If big companies suddenly fall apart, it can affect thousands of jobs – those in charge shouldn’t just go like nothing happened.

“These new rules will be a wake-up call for all the bosses who have slept behind the wheel of our largest businesses.”

One of the goals will be to combat the dominance of audit firms

One of the goals will be to combat the dominance of the Big Four audit firms, with Quarteng promising to ban auditors who have failed to verify the accounts of large companies.

A regulator called the Audit, Reporting and Management Authority will replace the existing Financial Reporting Board. This body will be empowered to conduct a survey of the largest private companies with a turnover of more than £ 750 million. But accountant and academic Lord Sika told the Mail that the government’s proposal was purely “cosmetic”.

He said: “It will not help stop financial scandals or help corporate governance.”

He said the details provided by officials did not suggest that any issues highlighted by such as Carillion or BHS were “really being addressed”.

“Those who do not study history are destined to repeat it,” he said, adding that “for more competition” large firms need to be broken up.

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In the UK, the fire audit sector is set for a long-awaited overhaul

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