Multiple corporate failures such as Carillion & Patisserie Valerie show that something has gone wrong with auditing and with the way companies are run. As mentioned on our page “Are you happy with the quality of corporate reporting? Have your say” the Government is trying to fix this.
The 232-page consultation document “Restoring trust in audit and corporate governance” from The Department for Business, Energy & Industrial Strategy (“BEIS”) sets out the Government’s thinking regarding possible improvements.
We consider that in many cases BEIS is not being radical enough.
In particular, we believe the power to appoint auditors of public companies should be taken away from those companies and put in the hands of an independent regulator. This would stop auditors behaving as if company management were their client, when the true clients are shareholders.
Other key issues identified are:
Share registration system disenfranchises the beneficial owners
Change directors’ legal responsibility
More legal protection for whistleblowers, regulators, and auditors
Download our full 77 page response from this link.