Julia Irvine 18 Dec 2018 10:56am

Brydon to head Project Flora

Following a prolonged search for an independent and well regarded business leader to head up its review of UK audit standards, the Department for Business, Energy and Industrial Strategy has finally appointed Donald Brydon, outgoing chair of the London Stock Exchange Group

The independent review will look at the quality of standards delivered by UK auditors and what more can be done to make them “more effective and reputable” as well as how better to meet public, shareholder and investor expectations.

Brydon, who is chairman of the Sage Group, will bring extensive experience in the finance and audit sector to the role. He will be supported by an advisory board of his choice.

Welcoming his appointment, business secretary Greg Clark said, “The UK is rightly recognised internationally for our outstanding business environment and responsible business practices, both of which are fundamental reasons why we are one of the best places in the world to work, invest and do business.

“I’m delighted that Donald Brydon will be leading this review, following the important work of Sir John Kingman and the CMA [Competition and Markets Authority], and his work should help us improve and restore confidence in the quality and rigour of audit companies.

“Audit companies need to learn the recent lessons from high profile audit failures and reform to regain public confidence, or they will be forced to do it.”

The Brydon review will build on the work of the Kingman and CMA reviews by considering: how far audit can and should evolve to meet the needs of investors and other stakeholders; how auditors verify information they are signing off; how to manage any residual gap between what audit can and should deliver; and what the public’s expectations are from audit.

Brydon will assess today’s audit model to see whether it can be made more effective. He will also consider how future audits audit might take account of changing business models and new technology to better serve the public interest.

BEIS said that more detailed terms of reference and a project plan would be published in the New Year.

The Brydon review, or Project Flora, as it was originally known, was conceived in November 2017 by the Audit Quality Forum – with the support of the then minister for the professions, Margot James – with the aim of coming up with proposals on the future shape and scope of audit.

It ran into problems in trying to find someone as chair who could be “fully independent, not conflicted and who could command the respect of the profession”.

Various business leaders were approached, including Baroness Shriti Vadera, chair of Santander, but they were not interested.

However, once the Kingman and CMA reviews were announced, BEIS took the project on as it fitted well with the reform of audit brief.