Government proposals on audit reform

30 June 2022

The government has announced its plans to 'revamp the UK’s audit regime’. This follows a consultation on audit reform, which we responded to last year, that sought to minimise corporate failures such as Carillion, Patisserie Valerie and BHS.

The new proposals introduce a £750m turnover and 750 employee threshold for defining companies as Public Interest Entities (PIEs). Currently, the definition is reserved for issuers of public shares or holders of public debt, such as housing associations. The new definition is targeted at companies, however housing associations are, mainly, community benefit societies, so would probably not fall under this new definition – we will be seeking clarity on this point.

The impact of these reforms could have been wide ranging with particular, and probable negative impact on the audit market.