Audit reforms aim to prevent accounting scandals

Audit reforms aim to prevent accounting scandals

May 30, 2022 by BBC

Key Facts

  • Image source, Getty Images Image caption, Companies like Carillion collapsed despite their accounts being signed off by one of the Big Four globally recognised auditors A review into how company books are inspected has been announced in a bid to prevent future accounting scandals and business collapses.
  • Meanwhile, rules for small businesses will be relaxed as the government said they could be "forcing too many of Britain's smallest businesses to spend time and money preparing accounts to a level of detail only needed for larger companies, distracting them from focussing on growth and creating jobs.
  • The government will establish a new watchdog, a requirement that larger companies have to employ an auditor outside of the Big Four and bringing large privately owned firms and some local authorities onto the regulators radar.
  • However, in a post-Brexit world the government is keen not to be seen to be imposing new burdens on business and has watered down its initial proposals thereby excluding hundreds of large private companies and smaller businesses from the additional requirements.

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