The Kingman Review
Jake Holdroyd discusses bold suggestions for the future of audit.
Following the collapse of Carillion and with other recent corporate failures, such as BHS and Patisserie Valerie, the audit profession has come under increased scrutiny. Some even claim that audit is broken. As a result, in April 2018, Sir John Kingman was asked by the Secretary of State to conduct a 'root-and- branch' review of the operation of the Financial Reporting Council (FRC).
His objectives were to ensure that:
- The FRC is in a position to stand as a beacon for the best in governance, transparency and independence; strengthening its position and reputation.
- The organisation's structures, culture and processes are fit for the future, alongside its oversight, accountability and powers; and its impact, resources and capacity.
The Kingman Review was published on 18 December 2018 and makes a total of 83 recommendations, which include the proposal that the FRC should be replaced with an independent statutory regulator. This will be known as the Audit, Reporting and Governance Authority and be accountable to Parliament.
The headline chapters of the review are:
- FRC structure and purpose.
- FRC: Effectiveness of core functions.
- Corporate failure.
- The new regulator: oversight and accountability.
There are concerns within the profession that:
- New regulations should be proportional.
- Although focused on FTSE 350 companies, regulations may trickle down to the SME audit sector, increasing regulatory burden and costs for audit firms and their clients.
The public consultation closed on the 11 June 2019 and Sir John Kingman and his team have now commenced the review of its findings.
What can Page Kirk do in terms of audit for your business?
Conducting an audit will help your team make sure that everything is kept up to date and properly recorded. Therefore, audits are a valuable benefit to your business, rather than an evil necessity.
Here at Page Kirk, we are registered with the institute of Chartered Accountants in England and Wales to carry out core auditing services, including:
- Statutory audits
- Internal audits
- Due diligence
- Benchmarking in your sector
- Minimisation of fraud exposure
- Specialist audits
We can perform your auditing and financial analysis with a minimum of fuss and maximum efficiency and accuracy.
In addition to giving you peace of mind that your accounts are fully compliant with statutory requirements, we can use the process to help identify strengths and weaknesses in your business finances and suggest ways of improving them.
How do you know whether you need to have a statutory external audit?
If you are a limited company or an LLP with a turnover of more than £10.2m and/or total assets of more than £5.1m, then you are obliged to have a statutory external audit.
Smaller organisations can also choose to have a statutory external audit if the shareholders and bankers of the organisation are looking for extra assurance.
If you would like to discuss anything in this article call 0115 955 5500 or email enquiries@pagekirk.co.uk.