The headline message is that they will prevent high-profile corporate failures and will introduce more competition to the audit market.
We asked our clients if they thought the reform proposals would achieve these aims.
Although almost three-quarters (73%) of respondents recognise the need for reform, that is where the agreement with the government’s proposal ends. The overall impression is that the new requirements will be a lot of extra work for no noticeable reward, with only 36% of respondents believing that these reforms will bring about an improvement to the current situation.
The proposals will significantly increase costs and bureaucracy, without a corresponding improvement in corporate governance and the audit market. Respondents believe that over-burdening growth enterprises with disproportionate amounts of regulation could drive companies to seek finance elsewhere.
Introducing proportionality would twist the kaleidoscope and the reforms would be seen in a much more favourable way. Over 80% of respondents say they would prefer to see a tier system based on market capitalisation or some other size criteria.
The results of our survey are insightful and compelling and make for interesting reading!
We hope you enjoy reading our report and if you would like to discuss any of the topics included, please do not hesitate to contact our Capital Markets team.
Listed businesses are highly sceptical of what the government’s proposed reforms to audit and corporate governance will achieve without a more proportionate approach, according to new research by leading accountancy firm PKF.