IoD boss joins criticism of Peter Kyle’s U-turn on Audit reform
The bosses of the Institute of Directors (IoD) and the Chartered Institute of Internal Auditors are among some City leaders hitting back against the government’s U-turn on the Audit Bill.
In a scathing open letter to the Business Secretary, Peter Kyle, the leaders called the move “a significant step backwards, particularly after the commitment made in the King’s Speech to publish a draft Bill.”
The Department of Businesses and Trade revealed on Tuesday, buried in a detailed press release, that the government would scrap the Audit Reform and Corporate Governance Bill to “avoid significant new costs to firms”.
It was previously shelved by the Tory government in November 2023 in order to focus on “growth and the UK’s competitiveness”, but returned to the table when Labour took over power.
The proposed plans were supposed to overhaul audit and corporate governance by replacing the Financial Reporting Council (FRC) with a new regulator, the Audit, Reporting and Governance Authority (ARGA).
Government criticised over the move
Today, Jonathan Geldart, director general of the IoD, Anne Kiem OBE, chief executive of the Chartered Institute of Internal Auditors, and Catherine Howarth, chief executive of ShareAction, are among the 11 industry leaders, campaigners and academics to write to Kyle.
“If the government is serious about driving growth and delivering economic stability, it must act to prevent further avoidable failures through stronger oversight of our largest companies,” the letter stated.
Instead of going ahead with the new regulator, the government said it will prioritise the FRC.
“We urge you to publish the proposals for a modernised corporate reporting framework without delay, and make it a clear priority to deliver the strengthened audit regulator,” the leaders added.
Elsewhere, Dean Beale, executive director of the Centre for Public Interest Audit, also wrote a separate letter to the government, stating the move to drop the Bill was “deeply disappointing”.