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Audit and corporate governance reform

In May 2022, the UK government proposed measures to restore trust in governance, reporting, and auditing. ICAEW’s Audit and Assurance Faculty unpacks the key issues.
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Insights

FRC slashes UK Corporate Governance Code revisions

More than half of the proposals outlined in its consultation will not be taken forward in the interests of reducing burdens, regulator says.
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Insights

ICAEW: King’s Speech audit reform omission “very disappointing”

The absence of primary legislation for proposed audit reforms increases the risk of reduced capacity to respond to the next Carillion, ICAEW warns.
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Proposals strengthen big business assurance and resilience claims

Proposals strengthen big business assurance and resilience claims

Long-awaited audit and corporate governance proposals are put forward by government, but missing elements of the reform jigsaw – including ARGA establishment and PIE definition – still needed, ICAEW warns.
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FRC position paper: ‘the profession should lean in’

FRC position paper: ‘the profession should lean in’

The FRC is taking an incremental approach to moving forward the audit and corporate governance reform agenda. It leaves the profession with plenty to do if momentum is to be maintained.
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The tech challenges and opportunities for audit

The tech challenges and opportunities for audit

While methodologies for audit remain the same, software has evolved fast. On the path towards a more technologically advanced process, audit needs to adapt to take a more detailed analytical approach.
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Insight news

Developing a meaningful audit and assurance policy
  • Article
  • 23 Jun 2023
ICAEW’s Audit and Assurance Faculty has updated and reissued its report responding to the introduction of AAP, bringing together a broad range of perspectives.
How do audit committees perceive corporate fraud risks?
  • Article
  • 04 May 2023
ICAEW’s Audit and Assurance Faculty considers audit committee perspectives on corporate fraud and how it can be better prevented and detected.
Mapping out a robust Audit and Assurance Policy
  • Article
  • 27 Jul 2022
Under UK government plans, the nation’s largest companies will soon be expected to publish a triennial Audit and Assurance Policy. What are the fundamental steps for getting this right?
The Resilience Statement – everything you need to know
  • Article
  • 27 Jul 2022
As part of the wider shake-up of corporate governance and audit reform, the government has proposed the introduction of a Resilience Statement for Public Interest Entities in a bid to improve corporate reporting and shore up confidence in UK plc.
How to retain talent in audit
  • Article
  • 27 Jul 2022
Auditors frequently struggle to hang on to their brightest talent. What should they do to boost retention rates? Firms and recruitment specialists provide some ideas.
The new definition of PIE
  • Article
  • 27 Jul 2022
The government is set to expand the definition of public interest entities, bringing as many as 600 new companies under the new classification. There remain concerns, however, about the government’s approach.
Can ARGA fix local audit?
  • Article
  • 27 Jul 2022
Will the new regulator have what it takes to tackle the problems that are plaguing local authority audits? Voices from three stakeholder bodies provide their thoughts on the Audit, Reporting and Governance Authority’s potential effectiveness.
Using tech to enhance audit
  • Article
  • 15 Jul 2022
The rate of technology adoption has accelerated during and post-pandemic as firms have engaged with new ways of working. How are these ever-changing tools reshaping audit?

Exploring the headline reforms

Developing a meaningful Audit and Assurance Policy
  • Report
  • 15 Jun 2023
ICAEW recommendations in this report and the extensive outreach and evidence gathering process on which they are based, suggest that introducing an “Audit and Assurance Policy“ could render corporate information more informative.
Sharpening the focus on corporate fraud: an audit committee perspective
  • Thought leadership report
  • 04 May 2023
This report from ICAEW's Audit and Assurance Faculty considers audit committee perspectives on the nature and extent of corporate fraud and what the corporate sector is doing to improve the chances of preventing and detecting it.
Audit manifesto
  • Article
  • 23 Nov 2020
This manifesto for audit distils knowledge and insights from ICAEW’s AuditFutures initiative into five principles for building a modern audit profession.
Sharpening the Focus on Corporate Fraud
  • Report
  • 26 Jul 2022
What steps are audit firms taking now to better facilitate fraud deterrence and detection and what more can be done by all players in the financial reporting ecosystem?
Driving more informative auditor resignation statements
  • Helpsheets and support
  • 07 Apr 2022
Are auditors providing meaningful information in their resignation statements, and if not, why not? This article looks at the requirements and what stakeholders have been saying.

Standard setting

Exclusive The future of less complex entity audits
  • Article
  • 04 Apr 2022
The proposed new standard for audits of less complex entities is not perfect, but it is progress – and it is needed as there are fewer firms performing small audits.
Why LCE audits matter
  • Article
  • 31 Jan 2022
As the consultation on a proposed international auditing standard for the audit of ‘less complex entities’ (ISA for LCE) draws to a close, it’s time to make the case for why it’s needed.
Less complex entity audits
  • 12 Nov 2021
IAASB has issued a draft proposal for a new auditing standard for less complex entities (LCEs). While based on the concepts and principles of the International Standards of Auditing (ISAs), it would follow a simplified, risk-based approach. Join Tom Seidenstein, IAASB Chair, as he discusses the proposals, including their background and development.
Exclusive Auditing Less Complex Entities
  • Article
  • 04 Oct 2021
ICAEW welcomes IAASB’s initiative and the timely development of a new standard for auditing less complex entities, hopefully reducing the risk of jurisdictional divergence.
Less complex entities: ICAEW salutes IAASB’s initiative
  • Article
  • 29 Jul 2021
ICAEW welcomes the issue of a draft standard for the audit of less complex entities by the International Auditing and Assurance Standards Board as a move in the right direction.
Audit quality: the role of standard-setting
  • Thought leadership report
  • 12 Oct 2020
What role do auditing standards play on audit quality? This essay from the Audit and Assurance Faculty examines how audit standards affect audit quality, and what changes could be made both to international standards and local UK standards to improve audits.
Support SME audits with new standard for less complex entities
  • Article
  • 12 Jun 2020
15 June 2020: ICAEW has added its voice to renewed calls for a separate auditing standard for ‘less complex’ entities ahead of a crucial meeting of the International Auditing and Assurance Standards Board to decide on the issue.

Inquiry into audit background

Audit reform timeline
  • Article
  • 07 Dec 2020
Following the collapse of Carillion in January 2018, four main reviews were launched on audit reform, each looking at different aspects of the debate.
Restoring trust in audit and corporate governance
  • Hub page
  • 13 May 2021
'Restoring trust in audit and corporate governance’ is the BEIS white paper that sets out proposals on strengthening the UK’s corporate governance framework and the way companies are audited. This is where we share with you ICAEW’s views on the consultation, explore what restoring trust means, and share information on the reform agenda.

Thought Leadership: the future of audit

Audit quality: how to raise the bar
  • Thought leadership report
  • 10 Mar 2021
What steps can and should audit committees, audit regulators, investors and auditors in the UK take to improve audit quality? This essay from the Audit and Assurance Faculty examines audit quality in terms of ownership, behavioural aspects, and structural drivers.
Fraudulent financial reporting: fresh thinking
  • Report
  • 05 Feb 2020
In this essay we focus on ways in which the skills and insights of auditors can be brought to bear to maximise the likelihood of identifying fraudulent financial reporting.
Shared and joint audits: are two auditors better than one?
  • Article
  • 10 Sep 2019
Governments and regulators are considering whether to mandate shared or joint audits in an attempt to increase audit quality, competition and choice.
User-driven assurance: fresh thinking
  • Thought leadership report
  • 12 Dec 2019
With calls for better engagement between auditors and users, we recommend the application of a three "pillar" model of what we call "User-Driven Assurance"; a new way of thinking about assurance, directed in its first phase by the needs of the primary user – the shareholders.
Internal control effectiveness: who needs to know?
  • Thought leadership report
  • 29 Aug 2019
Reporting on the effectiveness of controls over financial reporting features prominently in the current reviews of UK audit and regulation. This essay explores the current position in the UK, compares it with what happens in the USA and elsewhere in the world, and sets out the case for change and potential options.
Internal controls reporting: sketching out the options
  • Thought leadership report
  • 08 Jun 2020
What might a future framework for reporting on internal control over financial reporting (ICFR) look like? This essay from the Audit and Assurance Faculty examines various reporting frameworks, including COSO and the UK Code, as well as how these fit in with Sir Donald Brydon’s recommendations.
What auditors do: the scope of audit
  • Thought leadership report
  • 16 May 2019
Recent corporate failures have increased public concern about the value of audit and the role of auditors. To help inform debate on the scope of audit, this second supporting paper to our Future of Audit thought leadership essays explains what auditors do, why audits are necessary, the limitations of audit, and what gets audited and what doesn’t.
Financial reporting: who does what?
  • Thought leadership report
  • 28 Mar 2019
This overview explains in simple terms who does what in the financial reporting system for UK companies with full main market listings.

Quality management

With new quality management standards for audit on the horizon, there is an opportunity for firms of all sizes to supercharge their audits and reap significant knock-on benefits that go beyond ticking the regulatory box

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