Letter: Good pro­gress made, but still more to do

Caril­lion’s col­lapse in 2018 marked a water­shed moment since when reg­u­lat­ors, the audit pro­fes­sion and oth­ers have delivered sub­stan­tial and sig­ni­fic­ant improve­ments (“A pre­scrip­tion to curb cor­por­ate fail­ures”, FT View, May 28). The Fin­an­cial Report­ing Coun­cil’s own qual­ity reports show the pro­por­tion of good audits increas­ing in inspec­tion cycles since 2018, which con­trasts with research by Shef­field Uni­versity’s Audit Reform Lab, which you cite, that there is an “appear­ance of declin­ing qual­ity”.

We agree there is more to do to reform audit and cor­por­ate gov­ernance. We have long called for legis­lat­ive reform to under­pin efforts to improve trust and account­ab­il­ity by redu­cing the risk of dis­orderly cor­por­ate fail­ure and enhan­cing gov­ernance at major UK com­pan­ies. At the core of this should be a strong stat­utory reg­u­lator and greater dir­ector account­ab­il­ity, along­side enhanced assess­ment of reli­ance and fraud risk. Such changes would rein­force the UK as a trus­ted loc­a­tion for for­eign dir­ect invest­ment.

We call on the next gov­ern­ment to bring for­ward the neces­sary primary legis­la­tion as a pri­or­ity.

Alan Val­lance
Chief Exec­ut­ive, ICAEW (Insti­tute of Chartered Account­ants in Eng­land and Wales), Lon­don EC2, UK