In April 2021, the UK government published its long awaited consultation paper on audit and governance reform, Restoring trust in audit and corporate governance. If implemented, the proposals would lead to considerable changes to the way that companies approach their financial reporting, requiring additional processes and procedures to be put in place. Directors of companies will be particularly interested in the proposals to strengthen directors' accountability, with proposals to give the Audit, Reporting and Governance Authority (ARGA), the successor body to the Financial Reporting Council (FRC), greater powers to sanction directors for failures in connection with financial reporting.
Key proposals at a glance
Companies in scope |
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Director accountability |
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Audit process and internal control |
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Review of annual reports |
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Annual report and accounts |
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Dividends |
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Audit market |
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Executive pay |
Further detail
We have published two briefings in which we discuss the proposals in more detail:
- To read more about the impact of the proposals on UK listed companies, click here; and
- To read more about the impact of the proposals on large AIM and UK private companies, click here.
We also spoke to the FRC's Kate O'Neill, Director of Stakeholder Engagement and Corporate Affairs, and Miranda Craig, Director of Strategy and Change, about the proposals. To listen to our podcast, please visit SoundCloud, Spotify or iTunes.
Key contacts
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© Herbert Smith Freehills 2023