19th Report - The Future of Audit

Summary written by Accountability Index from the government's response. It is not the government's own words.

The Government welcomes the Committee's inquiry and says it is "determined to act" on audit, but defers most of the Committee's recommendations to the Brydon Review and to its consultations on the Kingman and CMA proposals.

• On the audit market, including operational split, joint audit and audit rotation, it states that it "will be consulting on the CMA's recommendations" and will consider the Committee's recommendations in that light.
• On graduated findings, it says that, in the light of further evidence, it "will consider making graduated findings for audit mandatory". It does not commit to doing so.
• On disclosure of distributable reserves, it is "considering whether to go further and to make this a legal requirement" and has "taken careful note" of the recommendation. It will reach conclusions after considering Sir Donald Brydon's recommendations.
• It agrees with Sir John Kingman that the new regulator needs a new Board. It expects a new Chair, Deputy Chair and CEO for the FRC to be appointed "this summer", and says the preferred Chair candidate will appear before the Committee for pre-appointment scrutiny.

Read the government's response ↗ Report an error